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HomeMy WebLinkAboutJanuary 18, 2005 Work SessionCITY OF COLUMBIA HEIGHTS 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website at: www. ci. coh#nbia-heights, mn.us A DMINIS TRA T/ON NOTICE OF CITY COUNCIL MEETING to be held in the CITY' OF COLUMBIA HEIGHTS as follo~4~s: Mayor Ga/y L. Peterson Councilmembers Robert ,4. ~Villiams Bruce Nm~rocki Tammera Ericson Bruce Kelzenberg City Mana.qer ~Yalt Fehst Meeting of.' Date of Meeting: Time of Meeting: Location of Meeting: Purpose of Meeting: COLUMBIA HEIGHTS CITY COUNCIL TUESDAY, JANUARY 18, 2004 7:00 P.M. CONFERENCE ROOM 1 WORK SESSION AGENDA 1. Water quality complaint areas 2. Lead water services 3. Industrial Park condemnations 4. Street Rehab Zone 7B discussion 5. Plamfing Permit Fees modification. 6. Cormnunity Center Demand Analysis 7. Housing Maintenance License rates. 8. Purchase of 800 MHz radio from capitol fund. The City of Columbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, acco~muodation will be provided to allow individuals with disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call the City Council Secretary at 706-3611, to make an'angements. (TDD/706-3692 for deaf or hearing impaired only) THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER City of Columbia Heights Public Works Department Work Session Discussion Item Work Session Date: January 18, 2005 r, ~.--~ ~~ Prepared by: Kevin Hansen, Public Works Director/City Enginee Item: Water Quality Complaint Areas Background: Columbia Heights has received complaints of discolored water at various locations and for many years throughout the City. Two areas have recently generated more complaints than others: Alley from 37th to 39th Avenue, between Polk and Tyler Streets. Jefferson Street, from 49th to 51 st Avenues. Water mains throughout the City vary in age, materials, construction and flow but they all have one thing in common; that is, they are buried 6' to 12' in the ground. Therefore, City crews have to rely on reports from residents, personal observation, maintenance records and test results to evaluate water main problems. Various parts of the City experience rusty water from time to time and the problem can normally be abated by flushing the water mains in the area by flowing water through the fire hydrants. The areas described above have not responded to standard water main flushing or unidirectional flushing operations that normally flush the iron deposits out of the water main. Analysis/Conclusions: At this time the City has determined that the rusty water is caused by encrusted iron scale deposits sloughing off the inside of the water main into the water. To date, the problem originates only in unlined cast iron pipe, which was common pi'ior to 1962. Although iron scale has a tendency to turn the color of the water yellow or light brown, it is aesthetic in nature and not known to be a health risk by federally regulated standards. City staff has taken many samples, and continues to test the drinking water to ensure compliance with State and Federal requirements. The problem in general is called 'tuberculation' and a picture of what the inside of a tuberculated and clean pipe looks like is attached as figure 1. To resolve the rusty water problem, it is City staff's opinion that the water main needs to be either cleaned and lined or excavated and completely replaced. The following alternatives are presented for review and discussion: 1. Do Nothing, Continue Monitoring, Valving and Flushing. Prior to 2004, rusty water complaints were resolved at least temporarily by flushing the fire hydrants and exercising gate valves in the area. The water would typically remain clear for several months. In 2004, flushing hydrants in the area only cleared the water for significantly shorter periods of time, often times lasting only days in the subject areas. The cost for this alternative is minimal (staff time), but the effectiveness for the subject areas is also now minimal. Item: Water Quality Complaint Areas Page 2 Staff also conducted C-Factor testing on the subject mains. C-Factor testing involves isolating water main segments, flowing water and measuring pressures and flow rate. A C-Factor is then calculated which can be used to determine the amount of tuberculation in-pipe. Another way to look at a C- Factor is it is a measurement of resistance to flow in-pipe. New pipe will have a C-Factor of 135. We would have expected the C-Factors in the areas tested (based on age) to be in a range of 95-100. The measured C-Factors in the 39th alley water main was 52, and the Jefferson Area was 62 and 43. Because the measurements were so low in the Jefferson area, the testing was extended south of the 49th to 51 st area, which also indicated severely tuberculated pipe. 2. Continuous Flushing / Flow Water. Staff installed a continuous flushing system by plumbing a 2-½ inch pipe from the hydrant located at the alley entrance on 37th Avenue between Tyler Street and Polk Street to a catch basin on 37th Avenue. Continual flushing of the line began at this time. Water complaints turned into compliments while the flushing system was in operation. The system was disconnected in the fall with the onset of freezing temperatures resulting in discolored water complaints within 24 hours. This short-term action was taken as more of an evaluation technique for steady directional flow, improve circulation and a hypothesis for internal (chemical) coating of the main. It is wasteful of City resources and not available in the winter. It is not recommended except in short term-localized instances. 3. Individual On-Site Filtration. Staff worked with Culligan to evaluate the problem in the water and developed a Pilot Program to evaluate the effectiveness of providing individual filters designed for iron removal. Based upon the eight homes in the program, the results were varied and inconsistent. At times the filters worked at iron removal, while at other times the iron bypassed the filters. As a short-term and relatively inexpensive solution, this could be a technique for homeowners to use. The installation cost is about $250 - $300, with filter cartridges at about $18-20 each, with replacement about every 3 months. 4. Air Scouring. This is a new method of cleaning water main lines that staff found while researching alternatives. Air scouring is a technique developed in Australia and Great Britain. It is not a common practice in the US, yet. Air scouring claims to be more effective than flushing mains. Air scouring is a process where compressed air (dried, cleaned and filtered) is injected into the water main through a hydrant. This process increases the velocity of the flow of water in-pipe. As the velocity increases, deposits on the interior of the pipe walls are loosened and pushed forward, actually scouring the pipe walls. The air, water, and deposits are removed from the main and forced out a controlled exit, such as another hydrant. The advantage to this type of cleaning process is the time it takes compared to conventional cleaning methods, and it does not require direct access to the main that conventional cleaning does. The disadvantage is that it is ineffective on heavily tuberculated lines (as is our situation). Staff has queried other Cities and consultants, and found no one who has used, and in most cases heard of, this type of cleaning process. It also does not address the continued problem of exposed iron pipe in the line after the cleaning process is complete. Due to the heavy tuberculation found in the subject areas and unproven technique in the US, staff does not recommend this alternative. The nearest company that does air scouring (we could find) is in Pennsylvania and Item: Water Quality Complaint Areas Page 3 after reviewing our C-Factor tests, they advised methods other than air scouring to clean the subject pipes. 5. Mechanical Cleaning and Lining Mechanical cleaning of the pipe involves shutting down the subject pipe segment, cutting open and accessing (excavating and cutting open) the water main every 400 to 600 feet, and pulling or pushing a mechanical cleaning device (sometimes called a 'pig') through the line to remove the encrustation. Depending on the severity of the interior buildup, a water line may have to be "pigged" repeatedly until the original interior diameter is restored. Since this process leaves the iron wall exposed, lining the interior pipe is necessary to prevent water contact with the iron surface allowing the tuberculation process to start all over. In-place lining of water mains can be accomplished by two general methods: cement mortar and epoxy. Cement mortar lining is the current standard of the industry and all new ductile iron pipe (DIP) is cement mortar lined. This involves applying lean cement through a rotating head of a specific diameter. As the lining machine moves through the pipe, it leaves a smooth troweled finish. Epoxy lining was developed in the UK in the late 1970's, and has been used in the US since the early 1990's for water main. This process requires a cleaner wall surface than cement mortar, so more thorough cleaning is required. The epoxy lining is then applied with computer-controlled machinery to achieve the exact resin and hardener mix and application thickness. In either case, lining of the pipe provides a smooth interior wall resistant to mineral deposits and future tuberculation buildup. Next to complete pipe replacement, this is the most expensive pipe rehabilitation technique. Costs for mechanical cleaning and cement mortar lining can range from $45 to $65 per foot, depending on the pipe diameter and severity of buildup. Epoxy costs may be slightly higher. Other factors, such as adequacy of the street surface and frequency of water main breaks, should also be evaluated prior to using this method. The City of Minneapolis currently has an annual water main cleaning and lining program for the identical problems we experience. In 2004, they completed 50,000 lineal feet of pipe. Initial discussions with their staff indicated they would be willing to add Columbia Heights under their contracted program. The su~ect segment lengths are !,260 ft for 37th - 39th, Polk to Tyler and 1,300 ft for 49th to 51st, Jefferson. Based upon the estimate range obtained from the City of Minneapolis, the respective costs would be $56,700 and $58,500, or a total of $115,200 using $45 per foot. 6. Complete Water Main Replacement This technique involves excavating the street, removing the old water main, installing new water main, reconnecting all water services, and then reconstructing that portion of the street disturbed. This is the most costly of all alternatives due to the street restoration costs. The water main piping costs range from $40 to $60 per foot, depending on the pipe diameter. Road restoration costs can range from $120 to $150 per foot. Item: Water Quality Complaint Areas Page 3 7. Interconnect with Hilltop Interconnection with the City of Hilltop has previously been presented to the City Council. One of the recommendations of the 1999 Water Distribution Study was to interconnect with the City of Hilltop at various locations. Accomplishing this would have two main benefits to Columbia Heights. First, interconnection would provide an additional demand on our system that would decrease residence times (time in pipe) which affects water quality in the areas around Hilltop, including the Jefferson Street area. Second, interconnections would increase the fire flow to the pipe networks surrounding Hilltop, which are mostly 6-inch. In our 4 and 5 Street Rehabilitation Program, water main was extended to the Hilltop border at the recommended locations. The only capital cost would be to then extend and connect the pipes inside of Hilltop. Hilltop has recently conducted their own water distribution study that also supported this idea. Potential Funding: It should be noted that this is likely a system problem and not only isolated to the two segments identified herein. The City of Columbia Heights is currently addressing this problem in our Street Rehabilitation Program work when water mains are fully replaced. That work is paid for out of the Water Construction fund, bonded for, with debt service paid through the utility rates. Similarly, this work could be funded in the same manner. This work was not programmed in the 5-year utility rate study costs. The subject areas could be funded in 2005 considering the following: Delaying Street Rehabilitation Zone 7B until 2006 Construction. Our new rates included rehabilitation of the water tower (structural and coatings) and efficiency upgrades to one water pumping station. This work could be delayed one year. Our new rates programmed $300,000 in capital expense for Zone 7B, the water tower and water pumping station. Adjusting 2005 program work to include Huset Parkway water main replacement ($185,000) and contracting with the City of Minneapolis under their mechanical cleaning and lining program ($115,200) would maintain 2005 programmed expenses. The consequence of the above funding scenario would delay programmed work. Zone 7B would be delayed for one year until 2006, the water tower rehab could wait until 2006 construction (but not further), and the water pumping station could be completed in a future year. Requested Action: Discussion and direction on the Alternative List. Staff recommends consideration of one of two options: Alternative 1, do nothing and monitor; or Alternative 6, clean and line under the Minneapolis program. Attacbanents: Figure 1, Tuberculation picture. Figure 1 Ci_ty of Columbia Heights Public Works Department Work Session Discussion Item Work Session Date: January 18, 2005 x~,~[[~ / Prepared by: Kevin Hansen, Public Works Director/City Engine Item: Lead Water Service Replacement Background: A property owner in the Zone 7A construction area appeared at the Assessment Hearing in October with concerns about the cost of replacing the lead water service from the stop box to the house. In accordance with State and local regulations, lead water services must be replaced within one year of discovery. Council directed staff to present options for financing the replacement of these services. Analysis/Conclusions: Our work in the Street Rehabilitation Program indicates that the number of lead water services from the stop box to the house is small. We had 5 in 2004, but fewer in each of the previous years since street rehabilitation construction began in 1997. Several cities were surveyed concerning this issue. During a street construction project, about half of the surveyed cities allow the cost of replacing the service on the property taxes through an assess_ment process. Options lead service replacement are presented as follows: 1. No Change from past practice. Homeowners would be responsible for hiring a contractor and paying for the work. 2. Private Financing Tools. Homeowners would be responsible for hiring a contractor and paying for the work. A rebate could be made available through Council's expansion of Housing Rebate Program. Also, Community Development is working on a Tax Abatement program where property owners are rebated a portion of their property taxes. Public Conduct Work with Financing Options. a. The City would conduct the work and assess the property owner over a period of time. Since we would be working on private property we would need to arrange for access, in writing. The work would then be done as part of the street reconstruction project. Item: Lead Water Service Replacement Page 2 b. The work could also be bid separately on an annual basis, similar to our Miscellaneous Concrete Program. This would involve a public bidding process. After City approval of the low-bid submitted by responsible bidders, the work could be conducted and assessed to the property owner. An issue with this type of arrangement would be the requirements of the 429 process (public hearings). A Waiver of the 429 Process could be used when signed by the affected property owners. c. Interest rates and terms for the assessment period could be established exclusively for this work. Requested Action: Consider the alternatives and establish a date to discuss these options with property owners. Attachments: Survey ROSEVILLE: In 1987 the City replaced the last section of lead pipe within City right-of- way. The City paid for and replaced the portion from the main to the property line. It is unclear if the property owners ever replaced the line from the property line to the house. City code is that the water and sanitary service from the main to the house is the property owner's responsibility. When we are reconstructing a street, and a homeowner wants to replace their service as a part of the project we will provide assessment as a possible way to finance their improvement. The payoff time is t0 years. If they are doing it outside of a City project, we will not offer them this option. MAPLEWOOD: No longer owns our water system. We have an agreement that St. Paul Regional Water Services (SPRWS) owns and operates our entire water system. Their program, which we experienced in one of our reconstruction projects last year, provides for the utility to replace the service between the main and the stop box. While we haven't incorporated any projects in the past five years, Maplewood would allow a property to replace their lead water service between the stop box and the house on to have the cost assessed back to them over a 7-year period. This is a SPRWS program that we would follow, we just haven't used it. MENDOTA HEIGHTS: We only replace services when the watermain is replaced. The city pays for the portion of the service from the main to the stop box. The portion from the stop box to the house is the homeowner's responsibility. PRIOR LAKE: When I worked in Prior Lake, we had a project where we gave residents the option of replacing their services all the way into their house and we did add that amount to their assessments to be repaid over a 10 year period. SOUTH ST. PAUL: In South St. Paul when we rebuild a street we investigate the condition of the water and sewer service lines. If the water service is lead we replace it and assess 100% of the costs the homeowner. It is spread over 10 years, but it is normally in addition to their street assessment. We have, on occasion, and with a signed agreement, gone all the way up to the house with our contractor doing the work, but that is very rare. We have no program for reimbursement of work homeowners do on their own or with their own contractor. We have in the case of financial hardship done it for a homeowner on an emergency basis and charged it over three years to their utility bill at 7% interest. We are contemplating taking over the service lines from the property line to the main in the street. Currently the owners are responsible for all costs all the way to the main in the street. City Main to Stop Box Stop Box to House Assessment Term Columbia Included in construction Homeowner is responsible 10 or 15 Years Heights project-assessed to to hire plumber and pay for property owner work Minneapolis Homeowner is responsible Homeowner is responsible to hire contractor and pay to hire contractor and pay for work for work St Paul - St. Paul SPRWS pays Homeowner is responsible 7 Years Regional Water to hire plumber. City pays Services for work and assesses (SPRWS) property owner. Maplewood Included in construction Option to include with 7 Years (Owned and project- SPRWS pays construction project- operated by assessed to property owner SPRWS) Mendota Heights Included in construction Homeowner is responsible project-City pays to hire contractor and pay for work Prior Lake Included in construction Option to include with 10 Years project-assessed to construction project- property owner assessed to property owner Roseville Last service was replaced Homeowner was in 1987- City paid responsible to hire contractor and pay for work Provide the option to Provide the option to 10 Years include with construction include with construction project-assessed to project-assessed to property ovmer property ow~er South St. Paul Included in construction Occasionally include with 10 Years project-assessed to construction proj ect- property owner assessed to property owner In case of financial In case of financial 3 Years at 7% hardship will add to utility hardship will add to utility interest bill bill The following cities reported no lead services in their system: Bloomington Crystal Richfield Roseville COLUMBIA HEIGHTS CITY COUNCIL LETTER Meeting of: January 24, 2005 AGENDA SECTION: ORIGINATING CITY NO: DEPARTMENT: Community MANAGER'S Development APPROVAL ITEM: Adopt Resolution 2005-05, Authorizing BY: Randy Schumacher BY~~/. and Directing the Condemnation of DATE: January 12, 2005 Certain Property for Redevelopment and Road purposes BACKGROUND: Bob Lindall, Kennedy and Graven, Chartered will be available at the worksession to answer any questions on the attached documents. RECOMMENDATION: Staff recommends Adoption of Resolution 2005-05, Authorizing mad Directing the Condemnation of Certain Property for Redevelopment and road purposes. RECOMMENDED MOTION: Move to waive the reading of Resolution 2005-05, there being an ample amount of copies available to the public. RECOMMENDED MOTION: Adopt Resolution 2005-05, a Resolution Authorizing and Directing the Condemnation of Certain Property for Redevelopment and road purposes. Attachments COUNCIL ACTION: h: Consent2005~CL Res2005-05 DATE: TO: FROM: RE: ECONOMIC DEVELOPMENT AUTHORITY (EDA) January 12, 2005 Mayor and City Councilmembers Randy Schumacher, Project Manager Condemnation The Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Huset Park Development Corporation (Schafer Richardson the Developer), requires the developer to voluntarily acquire each of the parcels in the redevelopment area. I have attached a copy of the developer's letter that summarizes their efforts over the last couple months to voluntarily acquire property in the redevelopment area. Unfortunately, despite a good fair effort, they have been unable to acquire several of the necessary properties. Therefore, the developer is requesting that the EDA and the City proceed to acquire all such parcels by means of'negotiations or through its powers of eminent domain. Staff is satisfied that the developer has met the intent and conditions of the development agreement and recommend support for Resolution 2005-05. In addition, I have attached the copy of the section of the development agreement that outlines the required acquisition procedure. It also details the process in which the developer is required to pay for the entire taking procedure. Mr. Bob Lindall fi.om the !aw fi__rm of Ke_nmedy mud Graven, will be available at the worksessiofi to answer any questions the Council may have. CITY COUNCIL CITY OF COLUMBIA HEIGHTS COUNTY OF ANOKA STATE OF MINNESOTA RESOLUTION NO. 2005-05 RESOLUTION AUTHORIZING AND DIRECTING THE CONDEMNATION OF CERTAIN PROPERTY FOR REDEVELOPMENT AND ROAD PURPOSES WI~REAS, the City of Columbia Heights ("City") is a charter city duly organized and existing under the laws of the State of Minnesota; and WHEREAS, the City Council is the official governing body of the City; and WHEREAS, the City and the Columbia Heights Economic Development Authority (as successor to the Housing and Redevelopment Authority in and for the City of Columbia Heights) ("Authoritf') have undertaken a program to promote redevelopment of land that is characterized by blight and blighting factors within the City, and in this connection the Authority administers a redevelopment project known as the Downtown CDB Redevelopment Project ("Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 ("the Act") and the HRA Act, the Authority is authorized to acquire real estate by exercising the power eminent domain under and pursuant to Minn. Stat., Ch. 117, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, within the Project, the City and Authority have created the Huset Park Area Tax Increment Financing District ("TIF District") in order to facilitate redevelopment of certain property in the Project; and WHEREAS, the Authority and Huset Park Development Corporation; a Minnesota Corporation, ("Redeveloper") have previously entered into a Contract for Private Redevelopment dated as of October 25, 2004, (the "Contract for Private' Redevelopment") regarding redevelopment of the property described in Exhibit A attached hereto and other property; and WHEREAS, the Redeveloper, City and Authority have taken various actions in furtherance of the Project, pursuant to the Preliminary Development Agreement and Contract for Private Redevelopment, all of which indicate the Project is feasible and desirable, including, but not limited to, environmental, blight and economic studies, determination of needed public infrastructure, agreements to acquire and acquisition of property, relocation analysis and land use planning; and WHEREAS, the City and Authority believe that the redevelopment of the Redevelopment Property pursuant to the Contract for Private Redevelopment, and fulfillment generally of the Contract for Private Redevelopment, are in the vital and best interests of the City and the health, safety, morals, mad welfare of its residents, and in accord with the public purposes and provisions of RJL-256336vl A- 1 CI~205-23 the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS, the real estate described in Exhibit A attached hereto and incorporated herein (collectively, "Subject Property") is located within the Project, as presently constituted, and is among the parcels which are to be redeveloped pursuant to the Contract for Phvate Redevelopment; and WHEREAS, on October 25, 2004, by Resolution No. 2004-55, the City Council approved, established and adopted a Modification (the "Project Plan Modification") to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project (the "Project Area"), found that the adoption of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is characterized by blight, occupied by substandard buildings, and contaminated with pollutants; and that the financial assistance described 'in the TIF Plan will revitalize this area, significantly expand the amount and variety of housing stock in the City, and expand the tax base; and that, because these benefits would not accrue without the assistance provided, any benefits received by private redevelopers are incidental to the broader benefits achieved by the overall development of the TIF District; and WHEREAS, in said Resolution No. 2004-55, the City Council found that the TIF District portion of the Project Area is a "blighted area" within the meaning of Minn. Stat., §469.02, Subd. 11, and that acquisition, clearance and related activities to redevelop the TIF District portion of the Project Area in accordance with the Project Plan and the TIF Plan constitute a "redevelopment project" within the meaning of Minn. Stat. §469.002, Subd. 14; and WHEREAS, in accordance with Section 3.2 of the Contract for Private Redevelopment, the Redeveloper has notified the Authority in writing that (a) the Redeveloper has been unsuccessful in accomplishing acquisition of the Subject Property voluntarily after commercially reasonable efforts to do so; and (b) that such efforts included a written offer to owners of all such parcels to acquire such parcels for a price approved by the Authority as reasonable and an offer to mediate; and WHEREAS, the Authority found that the Redeveloper,s efforts to voluntarily acquire the Subject Property were .reasonable and satisfy the requirements for doing so under the Contract for Private Redevelopment; and WI~P,_EAS, acquisition of the Subject Property by the Authority is essential in order to eliminate blight and implement the Project; and WHEREAS, the Board of Commissioners of the Authority has found (and this Council also hereby finds) that redevelopment of the Subject Property consistent with the Project is necessary, convenient, desirable, for a public purpose, in the best interests of the citizens of the City and will promote the general health, welfare and safety of the community; and WHEREAS, the City Council finds that it is also necessary, convenient, desirable, for a public purpose, in the best intereSts of the City and will promote the general health, welfare and safety of the community for the City to acquire portions of the Subject Property for street purposes; and WHEREAS, the Board of Commissioners of the Authority has found that it is in the best interest of both the Authority and the City if the City proceeds to acquire all of the Subject Property RJL-256336vl A-2 CL205-23 and then convey to the Authority the portions thereof not required by the City for street purposes ("Remainder") so that the Authority may redevelop the Remainder pursuant to the Contract for Private Redevelopment; and WHEREAS, the Board of Commissioners of the Authority has found that the funding and construction schedule for the redevelopment pursuant to the Contract for Private Redevelopment makes it necessary to acquire title to and possession of the Subject Property prior to the filing of the final report of the condemnation commissioners to be appointed by the district court. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Columbia Heights, Minnesota that: 1. It is necessary that the Subject Property be acquired by the City in fee simple absolute for the stated public purposes through the exercise of the power of eminent domain. 2. The Authority's Attorney is hereby authorized and directed to take all steps necessary to acquire the Subject Property on behalf of the City, including, if necessary, by use of eminent domain proceedings, pursuant to Minn. Stat. §117.042, prior to issuance of an award of damages by Court-Appointed Commissioners. 3. The amounts stated on Exhibit B attached hereto are hereby determined to be just compensation for the various parcels of the Subject Property for the purpose of offers to the owners pursuant to Minn. Stat. § 117.036 and for the purpose of deposit with the District Court Administrator as the City's approved appraisal of value pursuant to Minn. Stat. § 117.042. OFFERED BY: SECOND BY: UPON VOTE: Adopted by the City Council of the City of Columbia Heights, Minnesota this __ ,2005. day of ATTEST: Gary L. Peterson, Mayor Patricia Muscovitz, Deputy City Clerk RJL-256336vl CL205-23 A-3 EXHIBIT A Legal Descriptions of Properties TO Be Acquired by Eminent Domain Proceedings (collectively, "Subiect Prope~ _W") Parcel E The street addresses of Parcel E are 3755 University Avenue NE, 3700-5th Street NE and 317-37th Avenue NE, Columbia Heights, Minnesota 55421. The property identification numbers for Parcel E are: 35-30-24-34~0003 (3700 5th Street NE) and 35-30-24-34-0004 (317 - 37th Avenue NE) The legal description of Parcel E is as follows: Lots 4 and 5, Auditor's Subdivision No. 50 Together with vacated and to be vacated streets and alleys accruing thereto upon vacation and appurtenant easements if any. According to the map or plat thereof on file and of record in the office of the County Recorder in and for Anoka County, Minnesota. Parcel F The street address of Parcel F is 620 - 39th Avenue NE, Columbia Heights, Minnesota 55421. The property identification number for Parcel F is: 35-30-24-43-0047 The legal descriPtion of Parcel F is as follows: Lots 1 and 2, Block 3, 2nd Subdivision of Block F, Columbia Heights Annex, together with that portion of the North ½ of 38th ½ Avenue Northeast abutting said Lots, heretofore vacated Together with vacated and to be vacated streets and alleys accruing thereto upon vacation and appurtenant easements if anY. According to the map or plat thereof on file and of record in the office of the County Recorder in and for Anoka County, Minnesota RJL-256336vl A-4 CL205-23 Parcel G The street address of Parcel G is 450 - 38th Avenue NE, Columbia Heights, Minnesota 55421. The property identification number for Parcel G is: 35-30-24-34-0002 The legal description of Parcel G is as follows: That part of Lot 3, Auditor's Subdivision No. 50, Anoka County, Minnesota, lying 9.00 feet Northwesterly of the vacated spur track once located on said Lot 3. Together with vacated and to be vacated streets and alleys accruing thereto upon vacation and appurtenant easements if any. According to the map or plat thereof on file and of record in the office of the County Recorder in and for Anoka County, Minnesota. ILIL-256336vl CL205-23 A-5 EXHIBIT B Just Compensation Amounts Parcel E F G · Property Address 3755 University Avenue NE Columbia Heights, MN 620 - 39th Avenue NE Columbia Heights, MN 450 - 38th Avenue NE Columbia Heights, MN Just Compensation Amotmt* $1,405,100 $438,210 $320,000 *Includes real estate and fixtures, if any, for entire parcel. RJL-256336vl CL205-23 B-1 · Schafer Richard. son December 30, 2004 Mr. Randy Schumacher City of Columbia Heights 590 40th Ave NE Columbia Heights, MN 55421-3835 RE: Property Acquisitions Dear Randy: As specified in section 3.2 of the Contract for Private Redevelopment (the "Contract") by~ and between the Columbia Heights Economic Development Authority ("EDA'), the City of Columbia Heights ("City."), and Huset Park Development Corporation ("HPD'), this letter describes HPD's efforts to volUntarily acquire each of the parcels in the redevelopment area. Table I below, and the notes' thereto, describe and summarize HPD's efforts in this regard in recent months. Unfortunately however, despite its extensive, good-faith efforts to do so, HPD has been unable to acquire several of the necessary properties. Consequently, and as specified in section 3.2 of the Contract, this letter constitutes I-[PD's formal request that the EDA (and City, for any parcels or portions thereof needed for Parkway right of way) proceed to acquire all such parcels -whether by means of negotiation or the exercise of its powers of eminent domain. Table I Address Property PIN See Note 550 39th Avenue NE CHC bldg 35-30-24-34-0040 1 CHC !and 35-30-24-43-0060 ! 620 39th Avenue NE Buckles 35-30-24-43-0047 2 3801 5th Avenue NE Rayco bldg 35-30-24-34-0024 3 Rayco land 35-30-24-34-0039 3 515 38th Avenue NE Pearo 35-30-24-34-0014 4 517 38th Avenue NE Pearo 35-30-24-34-0013 4 3800 5th Street NE Foundry 35-30-24-34-0041 5 3901 5th Street NE Foundry 35-30-24-34-0035 5 450 38th Avenue NE Smith 35-30-24-34-0002 6 317 37th Avenue NE Greif 35-30-24-34-0004 7 .3700 5th Street NE Greif 35-30-24-34-0003 7 [] Real Estate Development ~ Construction ;00 Ban'ks Building 615 First Avenue NE Minneapolis, ND,~ 55413 W Investment Phone 612.371.3000 :2¢t Leasing & Management Fax 612.359.5858 www. sr-re.com Mr. Randy Schumacher City of Columbia Heights December 30, 2004 Page 2 1. HPD, or its affiliates, owns this property. Efforts by the EDA and City are not needed to acquire it. 2. HPD had this property appraised early in the fall and sent the owner a Purchase Agreement based on its appraised value on October 13th. HPD followed up with a second letter sent on November 10th ,which proposed mediation with a neutral mediator. HPD met with Mr. Buckles on November 18th. Following that meeting, HPD made numerous phone calls during this time and sent the owner an updated Purchase Agreement incorporating the appraised value of fixtures and equipment on December 23rd. The owner has not responded. HPD does not believe its efforts to acquire this proper .ty will be successful, and requests' efforts to do so by the EDA and City. 3. HPD owns this property. Efforts by the EDA and City are not needed to acquire it. 4. HPD and the owner reached a verbal agreement in principle for the acquisition of the property in late September, and a Purchase Agreement based on that agreement was sent on October 15th. HPD sent the owner a follow-up letter suggesting mediation with a neutral mediator on December 20th. In the meantime, HPD and the Owner have also had numerous phoneconversations but have not yet reached agreement. Although we believe HPD's efforts to acquire this property voluntarily will ultimately be successful, because no binding agreement has been reached to date, we request that the EDA and Ci.ty begin efforts to acquire the Proper .ty. 5. HPD and the owner reached a verbal agreement in principle for the acquisition of the property in late-September, and a Purchase Agreement based on that agreement was sent on October 4th. HPD sent the owner a follow-up letter suggesting mediation with a neutral mediator on December 20th. HPD and the Owner have also had numerous phone conversations during this time. Although we believe HPD's efforts to acquire this property, voluntarily will ultimately be successful, because no binding agreement has been reached to date, we request that the EDA and City begin ~ffu, ~ to acquire the Property. 6. I-tPD had this property appraised early in the fall and sent the owner a Purchase Agreement based on its appraised value on October 13th. HPD followed up with a second letter sent on November 10th, which proposed mediation with a neutral mediator. Although HPD had hoped to send the owner an updated Purchase Agreement incorporating the appraised value of fixtures and equipment, becaUse the appraiser was not allowed access to the property we were Unable to do. I-LP_D also made numerous phone calls during this time, but the owner has not been responsive. HPD does not believe its efforts to acquire this property will be successful, and requests efforts to do so by the EDA and City.. 7. HPD has had repeated communication with the owner of this property and sent a Purchase Agreement based on a verbal agreement in principle on October 15th. H_~D Mr. Randy Schumacher Ci~/of Columbia Heights December g0, 2004 Page 3 followed up with a letter suggesting mediation with a neutral mediator sent on December 20fl'. HPD and the owner have continued to have numerous phone conversations, but an agreement has not yet been reached. Although we believe HPD's efforts to acquire this proper _fy voluntarily will be successful, because no binding agreement has been reached to date, we request that the EDA and Ci.ty begin efforts to acquire the Property. Randy, please let me know if I can answer any questions. Sincerely, David R. Frank Project Manager CC: Steve Bubul John Herman Evan Rice Mark Ruff Brad Schafer Section 3.2. Authority Parcels. (a) If the Redeveloper notifies the Authority in writing on or after December 1, 2004 that it has been unsuccessful in accomplishing acquisition of Parcels D, E, F and G voluntarily after commercially reasonable efforts (such notice to include ~a detailed description of the Redeveloper's acquisition efforts), then the Authority (and.. City, for any Parcels or portions thereof needed for Parkway right of way) will proceed to acquire all such Parcels (hereinafter referred to as "Authority Parcels") through negotiation or the exercise of its powers of eminent domain to. the extent permissible under law. The Authority and City will utilize so-called "quick take" powers under Minnesota Statutes Ch. 117 to the extent needed or desirable to allow the redevelopment described in this Agreement to proceed in accordance with the overall schedule. The parties will cooperate and consult with one another on any condemnation actions and specifically on the final price to be paid in settlement of any condemnation action. (b) During the pendency of any Authority actions to acquire any Authority Parcel, the Redeveloper shall be required to promptly pay all expenses incurred by the Authority in connection with the prosecution thereof, including legal, survey, title, appraisal, relocation, process service, court costs, and similar expenses (subject to reimbursement as a Public Redevelopment Cost in accordance with Section 3.8). The Authority shall, not more often than monthly during the pendency of the action, furnish the Redeveloper with a written itemized statement of all such expenditures. Redeveloper shall have two weeks from the receipt of such statement to pay its share of the same. (c) Not later than five days prior to any date on which the Authority is required to deposit any amount into court to obtain title and possession to any Authority Parcel, Redeveloper shall deliver to the Authority 100 percent of the amount of any such deposit or payment. The Authority shall then have tthe right, mad subject to the terms and conditions hereof., the obligation to use such funds to make such deposit or such payments. The Authority shall have no obligation to repay such funds received, deposited or paid pursuant to this Agreement should the redevelopment covered by this Agreement not be completed for any reason, except to the extent provided otherwise in Section 3.2(e) hereof. Ci_ty of Columbia Heights Public Works Department Work Session Discussion Item Work Session Date: January 18, 2005 \/'k~ Prepared by: Kevin Hansen, Public Works Director/City Engineer~-/' Item: Review of Zone 7B Street Rehabilitation Project Background: The City has completed the street rehabilitation work in Zones 1-7A. Previously, rehabilitation work in zones 6 and 7 were further split into smaller zones due to financial restraints. Zone 7B is scheduled for rehabilitation work in 2005. The Zone 7B area includes all streets west of University Avenue. Completing Zone 7B will complete an entire cycle of seven zones throughout the City. The original program contemplated dividing the City into 7 zones, with one off year, which would have been 2006, and then continuing the rehabilitation work in each zone on a repetitive 8-year cycle. Analysis/Conclusions: For the past several years, the City of Columbia Heights utilizes State Aid funding to supplement and maintain a positive cash flow in the street rehabilitation program. An updated 20-year projection is attached for informational purposes. To maintain the original intent of an eight year program, staff recommends adding that portion of Zone 1 south of 45th Avenue to Zone 7B. The remainder of the Zone 1 will be added to the following program year in Zone 2. The 2004 year-end balance in the City of Columbia Heights' State-Aid account was $-0-. Our annual allotment is approximately $560,000. The calculation for all State-Aid allotments considers two factors: construction needs and City population. By Rule, the City may only use the population portion of the allotment for the Street Rehabilitation Program, which equates to $270,000 annually. In addition, we use a percepXage of the annual allotment for local maintenance of our state-aid system, which by rule can be 25% or 35%. Staff requested 25% in 2005. Currently under design, the Huset Parkway will also place a demand on our State-Aid financial resources. It is anticipated that an advance encumbrance will be necessary for state aid funding of the Huset Parkway. This is the same process that was used to fund the Central Avenue project in 2002. But due to our current balance in the City's State Aid account, it will be necessary to take a year off the City's Street Rehabilitation program (as previously reported to the City Council). This will have to happen in program year 2005 or 2006. Staff recommends delaying the Street Rehabilitation Program from 2005 until 2006 for the following reasons: Item: Review of Zone 7B Street Rehabilitation Project Page 2 This year's remaining allotment can be used for the Huset Parkway project. As it relates to the City's General Fund, delaying construction of Zone 7B will save money in the Engineering Department. This can be accomplished by having City Engineering staff perform construction inspection for the Huset Parkway, funded by the project costs and not the 2005 Engineering Department budget. A consultant would otherwise perform construction inspection for a project this large, estimated at $3,000,000. It would also save on the project costs, as staff rates are less than consultant rates. · The Huset Parkway project also includes water main replacement. Our new water rates and associated bonds were programmed for capital expenses typical in the annual Street Rehabilitation Program and other water system needs such as water tower rehabilitation and pumping station rehabilitation. Adding the Huset Parkway water main estimate of $185,000 will exceed the 2005 programmed annual expense for programmed capital expenses calculated in our rates. By not constructing Zone 7B, the Huset Parkway water main replacement cost alone will be less than the annual programmed expense for 2005 of $300,000. This action would essentially change our programmed off year from 2006 to 2005. Requested Action: Authorize the delay of the Street Rehabilitation Zone 7B until the 2006 construction year, and add that segment of Zone 1 south of 45th Avenue to the 2006 construction program. Attachments: 20-year Street Rehabilitation Program Year Zone 1996 1997 1 & 2 1998 3 1999 ALLEY 2000 4 2001 5 2002 6A 2003 6B 2004 7A 2005 7B & lA 2006 2007 lB, 2 & 3 2008 ALLEY 2009 4 2010 5 2011 6 2012 7 2013 1 2014 2 2015 3 2016 ALLEY 2017 4 2018 5 2019 6 2020 7 TOTAL St Rehab (Recon, Partial Reoon, Overlay) Total Cost Assessment Citv Share $1,092,854 $844,675 $248,179 $837,081 $530,092 $306,989 $557,734 $226,681 $331,053 $552,076 $298,391 $253,685 $704,837 $475,452 $229,385 $829,920 $414,960 $414,960 $750,277 $449,735 $300,542 $1,287,810 $758,705 $529,105 $983,809 $695,084 $288,725 $1,860,596 $1,316,043 $544,553 $170,000 $85,000 $85,000 $888,316 $578,547 $309,769 $538,247 $457,510 $80,737 $1,609,524 $989,456 $620,068 $82,744 $67,709 $15,035 $800,520 $653,947 $146,573 $893,683 $676,360 $217,323 $154,652 $131,454 $23,198 $170,000 $85,000 $85,000 $732,545 $622,663 $109,882 $662,587 $563,199 $99,388 $497,972 $423,276 $74,696 $1,106,124 $835,099 $2~1,0~5 $17,763,908 $12,179,038 $5,584,870 Seal coat Total Cost Assessmen,t, Citv Share $72,166 $72,166 $0 $24,452 $24,452 $0 $103,976 $103,976 $0 $98,909 $98,909 $0 $133,591 $133,591 $0 $0 $0 $133,584 $133,584 $0 (Zone 6) $250,813 $172,933 $77,880 $365,952 $110,806 $255,146 $0 $0 $148,426 $95,325 $53,101 $139,654 $88,330 $51,324 $175,229 $62,566 $112,663 $217,083 $113,395 $103,688 $177,544 $90,270 $87,274 $204,316 $133,177 $71,139 $246,019 $222,805 $23,214 $0 $0 $157,467 $65,976 $91,491 $167,675 $67,616 $100,059 $400,420 $267,835 $132,585 $149,212 $135,346 $13,866 $3,366,488 $2,193,058 $1,173,430 Total Total Total Liquor Store Other Constructio~ Assessment city Share Contrib City Contrib Cash, FIo~w $883,381 $1,165,020 $916,841 $248,179 $160,000 $795,202 $861,533 $554,544 $306,989 $50,000 $194,882 $733,095 $66!,710 $330,657 $331,053 $50,000 $130,000 $582,042 $650,985 $397,300 $253,685 $50,000 $212,500 $590,857 $838,428 $609,043 $229,385 $50,000 $171,000 $582,472 $829,920 $414,960 $414,960 $50,000 $222,715 $440,227 $750,277 $449,735 $300,542 $50,000 $270,000 $459,685 $1,421,394 $892,289 $529,105 $50,000 $270,000 $250,580 $1,234,622 $868,017 $366,605 $50,000 $270,000 $203,975 $2,226,548 $1,426,849 $170,000 $85,000 $1,036,742 $673,872 $677,901 $545,840 $1,784,753 $1,052,022 $299,827 $181,104 $978,064 $744,217 $1,097,999 $809,537 $400,671 $354,259 $170,000 $85,000 $890,012 $688,639 $830,262 $630,815 $898,392 $691,111 $1 255 336 , $970 445 $21,130,396 814~372,096 $799,699 $85,000 $362,870 $132,061 $732,731 $118,723 $233,847 $288,462 $46,412 $85,OOO $201,373 $199,447 $207,281 , ~284 891 $6,758,300 $50,000 $270,000 ($275,724) $50,000 $85,000 ($225,724) $50,000 $270,000 ($268,594) $50,000 $270,000 ($80,655) $50,000 $270,000 ($493,386) $50,000 $270,000 ($292,109) $50,000 $270,000 ($205,956) $50,000 $270,000 ($174,418) $50,000 $270,000 $99,170 $50,000 $85,000 $149,170 $50,000 $270,000 $267,797 $50,000 $270,000 $388,350 $50,000 $270,000 $501,069 $50,000 $270,000 $536,178 $5,311,097 COLUMBIA HEIGHTS CITY COUNCIL LETTER Meeting of: January 24, 2005 AGENDA SECTION: ORIGINATING DEPARTMENT: CITY NO: Community Development MANAGER'S APPROVAl_ ITEM: Adopt Resolution 2005-04, BY: Robert Streetar BY:~~ Establishing Planning & Zoning Fee DATE: January 10, 2005 Schedule and First Reading of Ordinance No. 1479 BACKGROUND This memorandum recommends modifying the current planning permit fee structure to accurate reflect and fairly allocate the cost of this service. Current Fee Structure Current permit fees do not accurately reflect or fairly allocate the cost of providing the service. Subsequently the applicant is not paying the actual cost of the service, which results in the residents, through the property tax, paying the balance. This in effect'is a subsidy paid by residents who do not receive a direct benefit. For example, the cost to process the Aldi's application was approximately $600, but the permits fees Aldi's paid under the current structure were $400. The $200 balance not paid by Adli's is a subsidy paid by residents through property tax. This will also occur with the application for the first phase of the industrial park redevelopment. The developer will pay $600 to process the application, which will not nearly cover the cost to provide the complicated and detailed planning, engineering and public safety review and inspection of a $125 million dollar project Lastly, there may be few times when an applicant pays more than it.cost to process tl~e application, resulting in over payment. Since the benefit f[om granting a permit accrues primarily to the applicant, the applicant ought to assume the cost of the permit. Planning fees have only been update twice in 24 years, 1981, and 1996. Recommended Fee Structure The recommended permit fee modifications accomplish two things: It updates current permit fees to reflect the average cost of processing the application. Please see Table 1 below that compares current and recommended planning permit fees, as well as the recommended resolution. It amends the Zoning Ordinance allowing the City to collect the actual cost of processing the planning application. If the cost to process the application exceeds the average fee the applicant must make up the difference as a condition of approval. If the cost to process the application is less than the average fee the applicant receives a refund. Please find attached the recommended Ordinance language. Table 1 - Planning Permit Fee Com }arison Application Fees 'Current Fee ~ Recommended Fee ~ Appeal $100 $185 Comprehensive Plan Amendment $500 $545 Conditional Use Permit $100 $220 Final Plat $250 $395 Interim Use $0 $255 Minor Subdivision $250 $275 Preliminary Plat $250 $670 Site Plan Review $150 $370 Vacation $0 $150 Variance $100 $235 Zoning Amendment $500 $545 1- Fee is fixed regardless of the amount of time to process the application. 2- If the cost to process the application exceeds the average fee, the applicant makes up the difference as a condition of approval. If the cost to process the application is less than the average fee, the appficant receives a refund. Also, please find attached a Table 2, a comparison of Columbia Heights' current, and recommended permit fees, with eleven similar cities. As the table shows the recommended fees fall within the midrange of these cities. The Council is requested to make to motions, the first is to update the fees, and the second is to amend the Zoning Ordinance to allow the City to collect the actual cost of processing the application. RECOMMENDED MOTIONS: Waive the reading of resolution 2005-04 a resolution amending Planning and Zoning Fee Schedule, there being ample copies available to the public. Adopt resolution 2005 - 04, A Resolution Amending Planning and Zoning Fee Schedule. RECOMMENDED MOTIONS: Waive the reading of Ordinance 1479 Being and Ordinance Amending Ordinance 853, City Code of !977, pertaining to Zoning .~na r~¢velopment Ordinance #1428 there being ample copies available to the public. Move to set February 14, 2004 for the Second Reading of Ordinance 1479 Being and Ordinance Amending Ordinance 853, City Code of 1977, Pertaining to Zoning and Development Ordinance #1428. COUNCIL ACTION: ITl RESOLUTION 2005 - 04 RESOLUTION AMENDING PLANNING AND ZONING FEE SCHEDULE WHEREAS, the planning and zoning permit fees have not been adjusted since 1996 and do not reflect the increased cost of processing planning and zoning permit applications, WHEREAS, City Ordinance 853, City Code of 1997 (as amended) provides for the City Council to adjust the planning and zoning permit fees periodically, NOW, THEREFOR, BE IT RESOLVED, that the City Council of the City of Columbia Heights hereby adopts the following planning and zoning permit application fees schedule to be effective March 16, 2005. Application Fee Appeal $185 Comprehensive Plan Amendment $545 Conditional Use Permit $220 Final Plat $395 Interim Use $255 Minor Subdivision $275 Preliminary Plat $670 Site Plan Review $370 Vacation $150 Variance $235 Zoning Amendment $545 Offered by: Councilmember Second by: Counciimember Roll Call: Ayes: Nayes: Mayor, Gary Peterson City of Columbia Heights, Minnesota Patricia Muscovitz, CSM Deputy City Clerk ORDINANCE NO. 1479 BEING AN ORDINANCE AMENDING ORDINANCE NO. 853, CITY CODE OF 1977, PERTAINING TO ZONING AND DEVELOPMENT ORDINANCE #1428 The City of Columbia Heights does ordain: Section 1: Section 9.405 (5) currently reads: Section 9.405 (5) Application Fees. Fees for all applications for development or land use approval shall be established by resolution of the City Council. Fees shall be payable at the time applications are filed with the Zoning Administrator and are not refundable unless application is withdrawn prior to referral to the Plmm/ng Commission. There shall be no fee in the case of applications filed in the public interest by the City Council or Planning Commission. Is hereby amended to read as follows: Section 9.405 (5) Application Fees. Fees for all applications for development or land use approval shall be established by resolution of the City Council. ~'~ ~" ~' ~' ...... ~'~ ~* Section 2: This ordinance shall be in full force and effect from and after 30 days after its passage. First Reading: January 24, 2005 Second Reading: Date of Passage: Offered by: Seconded by: Roll Call: Patricia Muscovitz, Deputy City Clerk Mayor, Gary L. Peterson TO: FROM: DATE: SUB J: Mayor and City Council Members Robert Streetar, Community Development Director January 13, 2005 Market Analysis for a Community and Recreation Center Please find attached the report and well as the key findings produced by Maxfield Research, Inc. regarding the Community Center. Mary Bujold from Maxfield will attend the work session on January 18 to answer any questions Council Members may have. axq January 1~, 2005 MEMORANDUM TO: Mr. Robert Streetar City of Columbia Heights FROM: Ms. Mary Bujold Maxfield Research Inc. Key Findings of the Market Analysis for the Proposed Colnmunity Center in Columbia Heights, Minnesota Draw Area The majority of the potential demand for facilities at the cmmnunity center will come from Columbia Heights and the immediate surrounding area including northeast Mimaeapolis and Fridley. New Brighton and St. Anthony also have community centers. Some of the facilities such as the gymnasiums and child care are more likely to have a higher proportion of their use generated by groups and households that are from outside of the immediate draw area. Demographic Analysis Overall, the population and household base in Columbia Heights is aging. School enrollment is declining as the initial edge of the echo boom generation is now moving into the workforce and forming households of their own. The baby boom generation is generally now past its prime child-bearing years. School enrolhnents may increase slightly in the future as housing units turn over in Columbia Heights from older households to yotmg families with chilcken. At this thne, we are uncertain of the timeframe for a general turnover that would bring a significant nmnber of families into the area to reverse this trend. New housing developed in Columbia Heights is targeted primarily to households that do not have children. 615 1st Avenue NE, #400, Minneapolis, MN 55413 (612) 338-0012 (612) 904-7979 fax www.maxfieldresearch.com Mr. Bob Streetar City of Columbia Heights January 13, 2005 Page 2 More people are living alone, both younger and older ages. This fuels the delnand for facilities that will provide fitness-related activities such as classes, weight-training, exercise machines, etc. Household incomes in the Draw Area are generally modest. As such, it will be important to keep melnbership fees moderate. Market Competition Within the Primary Market Area, there is only one privately-owned fitness facility in St. Anthony and two public community centers, one in St. Anthony and one in New Brighton. We exclude the women-only facilities. There is only one pending facility in the Primary Market ga'ea, the proposal to develop the Salvation Army I<h'oc Center. Five cities have applied for the $12.0 million to fund this facility. The five Mim~esota cities are also competing against commulfities in other states. At this time, there is no indication that the Kroc Center would be built in Milmesota. Recommended Amenities We recommend the following amenities for the colmmufity center: Gyrm~asium: Two gylrmasiums, either built in one location or in two separate locations that would serve the following groups: Recreation center members and guests School sports groups Colmnunity recreation groups We estimate that two gy~maasiums would achieve an 85% usage rate during the peak winter months including usage by groups fi-om the School and COlrnnunity recreation. This usage rate includes time allotted for family gym and some minirnat open gym tilne &aring the daytime hours. There would be an increase in time available for open gym during the spring and sunm~er months, but little availability during peak periods (5:00pm to 9pm) on weekdays during the winter months. Our analysis found that excluding school use during the weekday daytime hours reduces the projected Colnbined usage of the gymnasiums to roughly 60%. We caution that an appropriate strategy must been implemented to ensure that members and their guests are not excluded from using the gylm~asium at least some evenings during the winter months when usage of the recreation components will be highest. If the gyrm~asiums are built together, there are some s3mergies afforded with being able to use both g3qns simultaneously for tournaments and sports camps. There would also be lower construction costs associated with this option and a likely greater availability of parking. MAXFIELD RESEARCH INC. Mr. Bob Streetar City of Columbia Heights January 13, 2005 Page 3 Fitness Area: aerobics machines, weight machines, fi'ee weights, stretching area and TVs. Aerobic studios: two studios, one larger and one smaller for fitness classes. Childcare play area: children's play area that can also be rented out for birthday parties and other events, similar to New Brighton's Eagle's Nest. Child Care Center: Full on-site daycare center that would serve Columbia Heights and the surrounding communities. Senior Center: a space designated for activities and meals for senior groups, members m~d non- members. We recormnend that the space be configured to allow for separation into smaller areas for smaller group activities. Senior fitness classes would be held either in an aerobics studio or in the gynmasium. Teen Center: small activity room with a pool table, or foosball, air hockey or other amenities that will appeal to teenagers. Meeting Rooms: Two to three small meeting rooms that cm~ be rented out to connnunity groups and other users. We recommend that one of the rooms be designed to incorporate sotmd balzier dividers for separation into smaller spaces. We recolmnend that cormnunity groups be given discounted rate. Operating Costs Our survey of public facilities identified that membership fees did not cover operating expenses at most of the facilities. The average budget shortfall was 19%. Projected Memberships aitu lncmu.I sh~ps We project that the recreation center will be able tv atuacL between ~7.~ 500 initially. Projected Membership Fees We recolmx~end that membership fees remain moderate to optimize the potential to attract the largest number of members to the recreational facility. We recolmriend that melnberslfip fees range from $15 per month for a single youth membership to $35 per month for a family membership. Non-resident fees would be roughly $5 per month higher. We also recommend that you also charge a modest enrolhrtent fee of between $30 and $75. MAXFIELD RESEARCH INC. A Market Potential Analysis For A Community and Recreation Cemer in Columbia Heights, Minnesota Prepared for: City of Columbia Heights Columbia Heights, Minnesota November 2004 November 23, 2004 Mr. Robert Streetar Conununity Development Director City of Columbia Heights 590 - 40~ Avenue NE Columbia Heights, MN 55421 Dear Mr. Streetar: Attached is the study A Market Potential Analysis for a Community and Recreation Center in Columbia Heights, Minnesota. The study includes an analysis of the market conditions for a new community recreational facility in Columbia Heights and provides an analysis of existing private and publicly owned health clubs near Columbia Heights. Detailed findings and recommendations regarding a new facility in Columbia Heights can be found in the Conclusions and Recommendations section at the end of this report. We have enjoyed perforating this study and are available if you need additional information. Sincerely, MA~LD RESEARCH INC. Mary C. Bujoid President Merrie A. Sjogren Research Analyst Attachment TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................................... Study Impetus ............................................................................................................ Draw Areas ................................................................................................................ Demographic Trends .................................................................................................. Market Area Community Centers and Health Clubs ................................................... Demand S~ and Recommendations .................................................................. PURPOSE AND SCOPE OF STUDY .......................................................................... Purpose and Scope of Study ....................................................................................... DEMOGRAPHIC ANALYSIS ..................................................................................... Market Area Definition .............................................................................................. Population and Household Growth ............................................................................. Employmem ............................................................................................................... Population Age Distribution ....................................................................................... School Enrollmem Trends .......................................................................................... Household Type ......................................................................................................... Household Income ..................................................................................................... Annual Expenditures on Club Membership Dues/Fees ........................................... .... CURRENT MARKET ANALYSIS .............................................................................. Introduction ................................................................................................................ Public and Private Health and Fitness Clubs ............................................................... Selected Metro Area Community Centers ................................................................... Membership Dues and Daily Admission Prices .......................................................... Pending Community Centers and HealtbJFitness Clubs .............................................. DEMAND ASSESSMENT AND CONCLUSIONS ..................................................... Demand Assessment .................................................................................................. Conclusions ................................................................................................................ Page 1 1 1 1 3 5 8 8 9 9 9 13 14 16 20 22 24 26 26 26 31 32 34 36 36 38 LIST OF TABLES Table Number and Title Page 1 Population and Household Growth Trends and Projections, Columbia Heights Market Area, 1990 to 2015 .............................................................................................. 11 2 Employment Growth Trends and Projections, Columbia Heights Market Area, 1990 to 2015 ....................................................................................................... 13 3 Age Distribution, Columbia Heights Market Area, 1990 to 2015 ......................... 14 4 School Enrollment, Columbia Heights School District #13, 1990 to 2004 ............ 16 5 School Enrollment by Race/Ethnicity, Columbia Heights Area School Districts, 1990 to 2004 ....................................................................................................... 18 6 Household Type, Columbia Heights Market Area, 1990 and 2000 ....................... 20 7 Household Income by Age of Householder, Columbia Heights Primary Market Area, 2004 .................................................................................................................... 22 8 Household Income by Age of Householder, Columbia Heights Primary Market Area, 2009 .................................................................................................................... 22 9 Annual Expenditures on Recreational Activities, Columbia Heights PMA and SMA, 2004 & 2009 ....................................................................................................... 24 10 Features/Amenities Comparison, Competitive Health Clubs and Conm~unity Centers, Columbia Heights Market Area ........................................................................... 27 11 Features/Amenities Comparison, Metro Area Community Centers, City of Columbia Heights ................................................................................................................ 30 12 Membership Dues/Fee Comparison, Twin Cities Conmiunity Centers, City of Columbia Heights ................................................................................................................ 32 13 Projected Annual Memberships and Total Usage, Columbia Heights Community Center 2010 & 2015 ....................................................................................................... 36 14 Recommended Fees for Potential Community Center, City of Columbia Heights, November 2004 .................................................................................................. 39 15 Projected Gym Usage, Columbia Heights Commtmity Center, November 2004... 43 EXECUTIVE SUMMARY Study Impetus Maxfield Research Inc. was engaged by the City of Columbia Heights to study the market feasibility of developing a new community recreational facility in Columbia Heights, Minnesota. The scope of this study includes a review of demographic trends and characteristics of the local household base as well as the existing supply of public and private recreational centers in the Columbia Heights area. The analysis leads to conclusions about the potential market success of a new community center including reconunendations for facilities and amenities, as well as recommended membership fees and target markets. This report draws on both primary and secondary data_ Secondary data is credited to the source when used, and in most cases, is U.S. Census data. Data on existing recreational facilities was collected by Maxfield Research Inc. and is accurate to the best of our knowledge. Draw Areas A new community/recreational center in Columbia Heights can expect to draw the majority of its users from a primary draw area (Market Area) which includes the City of Columbia Heights, St. Anthony, Hilltop, and portions of Northeast Minneapolis (mainly north of Lowry Avenue), Fridley and New Brighton. We estimate that 75 percent of the demand for a community center in Columbia Heights will come from this Primary Market Area, while an additional 25 percent of the demand will come from outside of this area. We also delineated a Secondary Market Area, as there are few recreational facilities within the Primary Market Area. The Secondary Market Area includes a portion of Roseville, all of Fridley, Spring Lake Park, Mounds View, Arden Hills and New Brighton. A map of the Columbia Heights Primary and Secondary Market Areas is shown on the following page. Demographic Trends Population and Households The Columbia Heights Primary Market Area had an overall population of about 68,600 people in 2000, which was a loss of over 140 people from 1990 (-0.2 percent). The Primary Market Area is expected to reverse the declines of the 1990s by adding just over 4,000 people by 2010 (+5.9 percent). Despite population losses, between 1990 and 2000, the Primary Market Area added over 1,000 households (+3.4 percent). This decade, the Primary Market Area is expected to add about 2,200 households through 2010 (+7.3 percent). Population Age Distribution The age distribution of the population relates to recreational needs in a given community. Health and fitness activities are becoming more popular, but especially in areas with a large base of young- to middle-age adults, MAXFIELD RESEARCH INC. 1 EXECUTIVE SUMMARY The most significant population shift during the 1990s was seen in the 65 and over age cohort with an increase of 3,147 people (+19.8 percent). By 2000 there were over 19,000 over the age of 65 in the Primary Market Area. Also, the aging of the baby boom in the Primary Market Area is having a significant impact on the age distribution of the population. During the 1990s, as the 25 to 34 age cohort declined by 20 percent, the 35 to 44 age cohort increased by 7 percent and the 45 to 54 age cohort increased by 16 percent. This decade the Primary Market Area is expected to see the biggest losses in the age 35 to 44 cohort (-3,146 people, - 15.0 percent), while the people age 55 and over increases by 17.1 percent (+5,500 people). Based on the demographics of the PMA alone, a community recreation center in Columbia Heights should provide services and amenities that will appeal to the area's aging population. School Enrollment Overall, student enrollment in Columbia Heights' public schools has mainly decreased by an average of-34 students per year (-1.0 percent) since the 1990s. The decline in student enrollment compared to household growth in the Primary Market Area reveals that most of the households being added are aging households, as well as some younger households without children. This trend is expected to continue this decade, as an increasing portion of baby boomers age into their 50s and 60s. Analyzing school enrollment data by student race and ethnicity reveals that the student population is growing more diverse. While the White student population has decreased every year since the 1990-91 school years, the Non-White student population has increased every year except one. Household Type People living alone was the fastest growing household group during the 1990s in the Total Market Area, increasing by 31.2 percent (+4,010 households). These households comprise 30% of the overall households in the Total Market Area and 35% of Columbia Heights' households in 2000. Household Income Household income data helps ascertain the different types of households in an area. Generally, households with higher incomes tend to be target markets for health and community centers. According to IHRSA 20 percent of households that belong to a MAXFIELD RESEARCH INC. 2 EXECUTIVE SUMMARY health club earn an income of greater between $50,000 and $74,999, while 49 percent of households with memberships earn an income of $75,000 and over. The median household income in the Primary Market Area in 2004 is estimated to be about $44,700, while the Secondary Market 3d'ea has a 2004 estimated median income of about $57,500. According to the Department of Housing and Urban Development, the 2004 median income for a household of four in the Twin Cities Market is $76,400. Household Expenditure on Recreation Activities In 2004, Primary Market Area residents are expected to spend $3.3 million on club membership dues or fees. This equates to an average of $530 per household annually or about $44 per month. In the Secondary Market Area in 2004, residents will spend about $3.7 million on membership fees or $700 per household annually ($58 per month).. Market Area Community Centers and Health Clubs Excluding six women-only facilities, there is only one privately-owned health club in the Primary Market Area that would be competitive with the proposed community center in Columbia Heights. This facility, Fitness Crossroad, opened in St. Anthony in 2001. Other than Fitness Crossroad, there are two community centers in the Primary Market Area, the New Brighton Family Service Center and the St. Anthony Community Center. The Family Service Center in New Brighton was built in 1995 and offers a fitness area, gymnasium and a children's play area called Eagle's Nest. The gym is for member use only and is not rented out or contracted out to local schools or other groups. The YMCA has a cor~m-mnity program site in Northeast Minneapolis. This site offers educational programs and meeting space for community groups, but does not have a fitness or recreation facility. This facility is affiliated with the YMCA in Coon Rapids, which is located outside of both the Primary and Secondary Market Areas. There are four competitive privately-owned facilities in the Secondary Market Area. These facilities include a Bally's and Northwest in Fridley, a women-only Lifetime in Roseville and The Gym, Inc. in Fridley. The only community center in the Secondary Market Area is the Moundsview Community Center. We also included an analysis of the Shoreview Community Center, as it is the nearest large community center. Total Market Area Memberships MAXFIELD RESEARCH INC. 3 EXECUTIVE SUMMARY The following table summarizes the number of memberships in the PMA and SMA by club type. The Shoreview Community Center, with 2,200 memberships, is outside of the Market Area and is therefore, not included in the following table or in our demand calculations for additional memberships in the Market Area. Primary Secondary Market Market Area Area Private Clubs 1,000 11,200 Community Centers 750 0 Curves/Women's Only Clubs 1,375 1,250 Total Memberships 3,125 12,450 Membership Fees We profiled five Metro Area community centers to determine amenities at fees that are typically offered. Membership fees among Metro Area community centers vary by each center. Overall, the average membership fee for resident adults is about $37 per month on a month to month payment plan or $315 per year annually ($26/per month). On average, non-resident membership fees are 26 percent higher than resident membership fees. Typically youth and senior rates are the same at the centers that offer these rates. Some centers do not charge enrollment fees. A representative at a local conmmnity center indicated that enrollment fees are crucial for covering upfront costs related to the · administrative tasks involved in enrolling new members and suggested that all new community centers include them. Memberships tend to be less expensive at the selected community centers compared to the privately owned health and fitness clubs, especially for resident families. Of the private health clubs, Northwest has the highest membership fees overall. The median membership fee overall is between $34 and $45 per month for an adult, which is comparable to the community centers profiled, but lower than the YMCA and Northwest. Pending Centers Maxfield Research Inc. interviewed a staff member from each of the cities in the Primary Market Area to determine if a community or recreation center is planned. The only pending project is the Salvation Army Kroc Center. Five cities in Minnesota have MAXFIELD RESEARCH INC. 4 EXECUTIVE SUMMARY applied for $12 Million to fund the development of a community, recreation, education and performing arts center. The five Minnesota cities are competing against communities in other states in the Midwest; there is no indication at this point that a Kroc Center will be built anywhere in Minnesota. Demand Summary and Recommendations The following table highlights the results of our demand analysis. We find sufficient demand to support the development of a new community and recreational facility in Columbia Heights. Our demand calculations were based on a facility with fitness areas and a gymnasium, excluding a pool. While a pool attracts some members, people not interested in using it, will not want to pay for it. Target Markets' We believe the main target markets for a new community facility are: older aduks, younger immigrant families, young non-immigrant families, and single adults or couples without children. Each of these target markets will desire different amenities at a new community center, most will be very price sensitive. Recommended Amenities We recommend incorporating the following amenities and features to attract local households to the new facility. Gyrrmasium space: two full court gymnasiums that would provide additional court practice time for youth and aduk basketball leagues, with additional availability for tournaments, special events. The space should be prioritized and scheduled so that sufficient time is allotted for open gym and family gym periods and not entirely progranuned with-league or team play. A running/walking track should also be :~.~,.~a ~:+u .... pan ~,~,u ..... · ........... a ~,-~,'~*~ r~,,,~ ~,,~ d d above the gym floor. We present two options for the construction of the gymnasiums. Option 1 constructs two gynmasiums in different locations, one near the school and one at the community center. Option 2 would located both gymnasiums at the community center. Fitness Area: aerobic machines (step, jogging, elliptical), weight machines (Cybex or similar), free weights, stretching area and TVs. The fitness area could potentially be separated into two areas, one for aerobic machines and another for weight machines and free weights. MAXFIELD RESEARCH INC. 5 EXECUTIVE SUMMARY Aerobic studios: for group fitness classes. We suggest providing free classes for members, as well as allowing non-members to take classes for a fee. Classes targeted to different age groups: young adults (i.e. kickboxing, p/lares, yoga), older adults (i.e. dancing classes, aeroNcs), children and parents with children. Also, consider incorporating classes targeted to different ethnic groups. Childcare play area: we suggest including an area that can be rented out for birthday parties and other events, similar to New Brighton's Eagle's Nest. We recommend offering ch/Id day care on site as a separate business. There should also be a child care service as part of the center with weekend hours and some limited evening hours to accommodate working families. A discount may be offered to members who want to utilize full-time child care during the day although depending on the demand, this may not be necessary. Senior Center: a room/area for activities and meals for senior groups, members and non-members. Teen Center: small activity room with a pool table, or foosball, air hockey or other amen/ties that will appeal to teenagers. Concessions area: offering snacks and beverages to members and guests and for special events and tournaments. The concessions area should also serve the meeting room space for basic refreshments. Other Recommendations Most of the health clubs and community centers profiled in this study have programs whereby they partner w/th health insurance providers to reimburse members a portion of their monthly membership fee if the member uses the club a certain number of times per month. This reimbursement can often be up to half of the membership fee making it an attractive incentive for members. We recommend offering this as an incentive for members, as many potential members will be attracted to join a health club w/th a health insurance reimbursement. Throughout our interviews with representatives of local community centers we found that all Metro Area community centers had a budget shortfall that was covered by a var/ety of funding mechanisms, for example: antenna fees, electric fund or other non- operating revenues, building fund, or the general fund. Anywhere fi'om 2 percent to 41 percent of the community center's operating budget was not covered by membership fees, while the average budget shortfall was 19 percent. Our analysis found sufficient demand to develop a new community and recreational facility in Columbia Heights. While we suggest that facility offerings focus on the needs of the existing aging population in the Primary Market Area, we also recognize MAXFIELD RESEARCH INC. 6 EXECUTIVE SUMMARY that the area is becoming more diverse. Therefore, the facility should be designed to meet the needs of a wide variety of users, including new households who will be attracted to the redevelopment sites in Columbia Heights and St. Anthony. A new facility will be supported by existing households, but should also serve as a conmaunity amenity that will attract new households into Columbia Heights. A community and recreational facility often serves as a marketing tool to attract new households, as well as reinvestment in a community. The facility should be designed for future flexibility and should allow for future expansion as the community center space needs will change in the future. MAXFIELD RESEARCH INC. 7 P~TRPOSE AND SCOPE OF STUDY Purpose and Scope of Study Maxfield Research Inc. was retained by the City of Columbia Heights to prov/de research and consuking services for the purpose of assessing demand (utilization potential) for a community and recreation center located on a proposed site at the intersection of Central and 41st Avenues in Columbia Heights, Minnesota. The scope of this study includes a demographic review of growth trends and characteristics of the population and household base in an area determined to be the primary draw or Market Area for a new cormnunity and recreation center in Columbia Heights. We inventoried competitive health and fitness clubs in the Market Area and other community centers in the Twin Cities Metro Area_ Our conclusions and recommendations focus on projecting usage (memberships and annual admissions) for the facility and analyzing its market positioning relative to its direct competition and other community centers in the Metro Area. This report includes both primary and secondary research. Primary research includes interviews with City staffand staffoflocal community centers. Secondary research is credited to the source when used, and is usually data from the U.S. Census. Secondary research is always used as a basis for analysis, and is carefully reviewed in light of other local factors. All of the information on existing and pending competitive projects was gathered by Maxfield Research Inc. and is accurate to the best of our knowledge. MAXFIELD RESEARCH INC. 8 DEMOGRAPHIC ANALYSIS Market Area Definition A new community/recreational center in Columbia Heights could expect to draw the majority of its users from a primary draw area (Market Area) which includes the City of Columbia Heights, St. Anthony, Hilltop, and portions of Northeast Minneapolis (mainly north of Lowry Avenue), Fridley and New Brighton. This Market Area was determined based on geographic and man- made boundaries, traffic patterns, and the location of health and fitness centers that would be competitive with the subject community center. We estimate that 75 percent of the demand for a community center in Columbia Heights will come from this Primary Market Area, while an additional 25 percent of the demand will come from outside of this area. We also delineated a Secondary Market Area, as there are few recreational facilities within the Primary Market Area. The Secondary Market Area includes a portion of Roseville, all of Fridley, Spring Lake Park, Mounds View, Arden Hills and NewBrighton. A map of the Columbia Heights Pr/mary and Secondary Market Areas is shown on the following page. Population and Household Growth Population and household growth are the primary generators of demand for additional fitness center space in an area, since some new residents who participate in fitness activities will choose either a private health club or community center to participate in fitness and/or sports activities. Employment growth is another indicator of demand, since job growth typically results in population and household growth. In addition, some users will also choose to use a facility that is close to their place of employment. When considering the potential demand for fitness centers, it is also important to assess data on the age distribution of the population, since the propensity to participate in fitness activities is different among various age cohorts, as well as data on average annual expenditures for club membership dues/fees. The following paragraphs review each of these demographic indicators for the Columbia Heights Primary Market Area and the implications on market demand. Table 1 presents population and household growth trends and projections for the Market Areas from 1990 to 2015. The 1990 and 2000 population and household figures were obtained from ~h~ U.S. Census B ,ureau, while the 20!0 and 2015 projections are based on data from the Metropolitan Council. Population During the 1990s, the population base in Columbia Heights declined by 2.1 percent (- 390 people). During the same time period, the Remainder of the Primary Market Area (PMA) added 249 people for a 0.5 percent increase. MAXFIELD RESEARCH INC. 9 DEMOGRAPHIC A3N. ALYSIS COLL~,'~IA HF, IGHTS COMML~TY CENTER NL.~F,T AREA [--~ PRIMARY ~IARKET AREA SECONDARY ~IC~T AREA ! Max~oldRos~arch, In total, the PMA lost -141 people between 1990 and 2000, decreasing its population base by -0.2 percent. At the same time, Minneapolis and the Metro Area added population. Minneapolis saw a 3.9 percent increase (+14,235 people), while the Metro Area added over 350,000 new residents (+15.4 percent). MAXFIELD RESEARCH INC. 10 DEMOGRAPHIC ANALYSIS While the PMA lost population, the Secondary Market Area (SMA) added 284 new residents between 1990 and 2000 (+0.4 percent). This decade the PMA is expected to reverse the population declines of the 1990s. Columbia Heights is projected to add 1,880 new residents by 2010 (+10.2 percent), as two significant redevelopment projects are pending in the City. The Remainder of the Prinm~ Market Area is expected to increase its population base by about 2,190 people (+4.4 percent). The SMA is also expected to add population this decade with about 800 new residents (+1.2 percent). In total, the Columbia Heights Market Area is expected to add over 4,800 people be4:ween 2000 and 2010 (+3.6 percent). Minneapolis is also projected to add more people this decade than during the 1990s with a 5.1 percent increase (+19,382 people), while the Seven County Metro Area is projected to add over 363,000 people this decade (+13.7 percent). Between 2010 and 2015, Columbia Heights and the Remainder of the Market Area communities will continue to experience population growth. By 2015, Columbia Heights is expected to have 20,900 residents (+500 people, +2.5 percent), while the Remainder of the PMA is projected to add 1,000 res/dents (+1.9 percent) and the SMA is projected to add 1,300 people (+1.9 percent). Households Table 1 also shows the number of households in the Columbia Heights Market Area communities from 1990 through 2015. Despite population declines, Columbia Heights increased its household base during the 1990s, adding about 270 new households (+3.4 percent) for a total of 8,033 households in 2000. The Remainder of the Pr/mary Market Area communities added about 730 new households during the 1990s, an increase of 3.4 percent. During this ,-,,- auuuu aouut l,oov new llousellOlus between 1990 and 2000 (+7.0 percent). By 2010, Columbia Heights is projected to have 8,900 households, an increase of 10.8 percent from 2000 (+867 households). Household growth in Columbia Heights and the Remainder of the Market Areas during this period will be a resuk ofinfill and redevelopment projects. MAXFIELD RESEARCH INC. 11 DEMOG ~RAPH'IC ANALYSIS The largest redevelopment project in Columbia Heights is three blocks south or me proposed site (at Central and 41~t Street) for the community center. This project, by Schafer Richardson proposes to redevelop an existing industrial park into 560 for-sale and senior housing units. According to the developer, this project is expected to be completed by 2010. The second project is the redevelopment of the K-Mart five blocks north of the proposed site. This project by Bruce Nedegaard is currently under construction with 231 housing units called Grand Central Lofts. The largest redevelopment project in the Reminder of the PMA is in St. Anthony with the redevelopment of the Apache Plaza. This project, by Pratt-Ordway, is eight blocks east of the proposed site and has about 700 pending housing units, including rental and for-sale product. The Remainder of the Primary Market Area is projected to add about 1,300 new households between 2000 and 2010, a growth rate of 6.0 percent. In total, the PMA is projected to have about 2,200 new households by 2010 (+7.3 percent). The Secondary Market Area is projected to add the about same number of households this decade as it did during the 1990s, with an additional 1,678 households (+6.6 percent). This compares to about 9,600 new households in Minneapolis (+5.9 percent). While several significant redevelopment projects are pending in the Market Area, growth continues to push outward into third-tier and outlying communities in and beyond the Seven County Metropolitan Area, as developable land within the Metropolitan Area's Urban Service Area becomes scarcer. The Metro Area is projected to add more households this decade than during the 1990s, with an additional 176,126 households (+17.2 percent). Household growth is expected to continue to be strong after 2010. Columbia Heights is projected to add 200 new households between 2010 and 2015 (+2.3 percent), while the Reminder of the Primary Market gxea is projected to add 600 househo!~ dm'Lng the same time period (+2.6 percent) and the Secondary Market Area is expected to !,000 hm~seho!ds by 2015 (+3.7 percent). Employment Employment trends can also give an indication of recreational needs for a community, as typically, households will use recreational facilities near home or work for convenience. Table 2 presents total employment growth trends and projections in the Columbia Heights Market Area fi:om 1990 to 2015. Maxfield Research compiled the figures, based on data from the Metropolitan Council. The following are key points concerning employment growth in the Market Area. MAXFl]gLD RESEARCH INC. 13 DEMOGRAPHIC ANALYSIS Columbia Heights added over 1,800 jobs in the 1990s for a 41.5 percent increase. During the same time period, the Remainder of the Primary Market Area added i,640 jobs (+5.3 percent) between 1990 and 2000. The Secondary Market Area added over 7,000 jobs during the 1990s for a 15.4 percent increase. From 2000 to 2010, the PMA is forecast to add just over 3,000 jobs (7.8 percent). Of the projected growth of jobs in the PMA during this decade, 2,850 of the new jobs (94 percent) are projected to be located outside of Columbia Heights. TABLE 2 E1VIPLOYMENT GROWTtt TRENDS AND PROJECTIONS COLUMBIA HEIGHTS MARKF~T AREA 1990 to 2015 i:~5;1J''& CENSUS ?} ?::t~.ST138~TI~:' 1990-2000 2000-2010 1990 2000 2010 2015 No. Pct. No. Pet. Primary Market Area Columbia Heights 4,536 6,419 6,600 6,675 1,883 41.5% 181 2.8% Remainder of Market Area 30,760 32,400 35.250 37,900 1,640 5.3% 2,850 8.8% Total.Primary Market Area 35?296 38,819 417850 44~575 3,52~ 10.0% 3~031 7.8% Secondary Market Area 46,006 53,103 63,850 65,925 %097 15.4% 10,747 20~% Minneapolis 278,438 301,826 317,000 324,750 23,388 8.4% 15,174 5.0% Metro Arm 1.272,773 1,563.245 1,815,715 1,903,100 290,472 22.8% 252,470 16.2% Sources: U.S. Census, Metropolitan Council; Maxfield Research Inc¢ Claritas, Inc. The SMA is projected to add even more jobs this decade than during the 1990s with a 20.2 percent increase in its employment base (+10,747 jobs). Minneapolis and the Metro Area as a whole are also expected to continue to add jobs this decade. Between 2000 and 2010, Minneapolis is expected to add just over 15,100 jobs (+5.0 percent), while the Metro Area will add about 250,000 new jobs (+16.2 percent). Population Age Distribution The age distribution of the population relates to recreational needs in a given community. Health and fitness activities are becoming more popular, but especially in areas with a large base of young- to middle-age adults. According to the 1990 International Health, Racquet and Sports Club Association (IHRSA)/American Sports Data"Health Club Trend Report," 41 percent of club members are between ages 18 and 34, while 38 percent are between ages 35 and 54. The same report states that the average age of members is projected to increase in the coming decade, due, in part, to the aging of the large baby boom generation, combined with the increasing MAXFIELD RESEARCH INC. 14 DEMOGRAPHIC ANALYSIS popularity of fitness among persons age 55 or older. This is expected to result in higher usage rates at health/fitness clubs, since older adult members of health clubs typically visit their club more frequently than younger members. Table 3 presents the age distribution of the Columbia Heights Primary Market Area population from the 1990 and 2000 Censuses, and projected to 2015 by Maxfield Rescarc1~, 3ased on county projections by the State Demographer. The table shows the number of people and the percent of the population in seven age categories. In 1990, people ages 20 to 34 comprised about 27 percent of the total PMA's adult population, with about 37,000 people. This age group saw a decline during the 1990s, as the youngest of the baby-boom generation began moving out of this age group during the decade (-5,953 people, -16.2 percent). Older baby-boomers (those ages 35 to 44 in 1990) aged into their mid 40s to early 50s during the 1990s, increasing the population of 45 to 54 year olds by 16.1 percent in the PMA. During the coming decade and beyond, a large portion of the baby-boom generation will age into their 50s and 60s. Between 2000 and 2010, the 55 to 64-age cohort is expected to increase by about 22 percent to an estimated total of 15,700 people in 2000 (+2,808 people). TABLE 3 AGE DISTRIBUTION COLUMBIA HEIGHTS PRIMARY MARKET AREA 1990 to 2015 ~:c~~:~ , , 1990-2000 2000-2010 2010-2015 Age 1990 2000 2010 2015 No. Pct. No. Pct. No. Pet. Under 20 34,211 33,i81 33,000 33,050 -1,030 -3.1~ -181 -0.5 50 0.2 20 to 24 11,762 10,834 11,200 10,900 -928 -7.~ 366 3.4 -300 -2.7 :25 to 34 25,035 20,010 20,800 21,200 -5,025 -20.1 790 3.9 400 1.9 35 to 44 19,535 20,946 17,800 17,250 1,411 7.2 -3,146 -15.0 -550 -3.1 45 to 54 15,693 18,227 19,800 18,700 2,534 16.1 1,573 8.6 -1,100 -5.6 55 to 64 12,858 12,892 15,700 17,000 34 0.3 2,808 21.8 1,300 8.3 65 and over !5,892 !9,039 2!,700 24,700 3,!47 !9.8 23661 14.0 3~000 13.8 20 to 54 72,025 70,017 69,600 68,050 -2,008 -2.8 417 -0.6 -1,550 -2.2 55 and over 28,750 31,931 37,400 41,700 3,181 11.1 5,469 17.1 4,300 11.5 Sources: Bureau of the Census: U.S. Census of Population and Housing (1990, 2000) MN Departr~nt of Administration Maxfield Research Inc. The PI~r~k had about 34,000 people under age 20 in 1990, or about 25 percent of the population. This group is known as the echo-boom, the children of baby-boomers. The first echo-boomers started aging into thek early 20s and forming their own MAXFIELD RESEARCH INC. 15 DEMOGRAP~C ANALYSIS households during the late-1990s. Between 2000 and 2010, the 20 to 24-age cohort is projected to increase to a total of 11,200 people (+366 people, +3.4 percent). The International Health, Racquet, and Sports Club Association indicates that while older adults are the fastest growing segment of the heakh/fitness club industry, the core group of users will continue to be young- to middle-age adults. The population in the Columbia Heights PMA is aging in place. While the 20 to 54-age cohort will see significant decreases over time, the number of people age 55 and over will increase by 31 percent between 2000 and 2015 (+9,769 people). Based on the demographics of the PMA alone, a community recreation center in Columbia Heights should provide services and amenities that will appeal to the area's aging population. School Enrollment Trends Maxfield Research reviewed recent trends in the public school enrollment in the Columbia Heights school district over the past decade. The Columbia Heights school district contains the Cities of Columbia Heights, Hilltop and the southern one-third of Fridley. The enrollment d~a, in Table 4, is from the Minnesota Department of Education. Enrollment trends are useful in that they can serve as an indicator of potential need for various types of cormnunity services. MAXFIELD RESEARCH INC. 16 DEMOGRAPHIC ANALYSIS TABLE 4 SCHOOL ENROLLlVIENT COLUlVIBIA HEIGHTS SCHOOL DISTRICT #13 1990-2004 Pre-K Elementary Secondary ANNUAL CHANGE Year Kindergarten 1-6 7-12 TOTAL No. Pct. ~0-91 296 1,605 1,422 3,323 91-92 280 1,581 1,429 3,290 -33 -1.0% 92-93 307 1,539 1,398 3,244 --46 -1.4% 93-94 273 1,454 1,332 3,059 -185 -5.7% 34-95 263 1,384 1,357 3,004 -55 -1.8% 95 -96 266 1,407 1,343 3,016 12 0.4% 96-97 290 1,348 1,395 3,033 17 0.6% 97-98 269 1,358 1,375 3,002 -31 -1.0% 98-99 311 1,366 1,390 3,067 65 2.2% 39-00 242 1,373 1,401 3,016 -51 -1.7% 00-01 276 1,366 1,376 3,018 2 0.1% 01-02 279 1,364 1,517 3,160 142 4.7% 02-03 268 1,347 1,415 3,030 -130 -4.1% 034)4 261 1,332 1,378 2,971 -59 -1.9% 1990-2000 No. Pet. No. Pet. No. Pct. No. Pet. -20 45.8% -239 -14.9% -46 -3.2% -305 -9.2% 2000-2004 -15 -5.4% -34 -2.5% 2 0.1% 47 -1.6% Source: MN Dept. of Education Key trends identified from our review of school enrollment growth in the Columbia Heights School District are: Overall, enrollment in Columbia Heights' public schools has mainly decreased by an average of-34 students per year (-1.0 percent) during the 1990s. The 1990-91 school year had the highest student enrollment of 3,323 students. The decline in student enrollment compared to the household growth in the Market Area reveals that most of the households being added are aging households as well as some younger households without children. This trend will continue this decade, as an increasing portion of baby boomers age into their 50s and 60s. Analyzing school enrollment data by student race and ethnicity reveals that the student population is growing more diverse. Table 5, on the following page, shows student enrollment by race and ethnicity. This data is from the Minnesota Department of Education. Columbia Heights School District [] While the White student population has decreased every year since the 1990-91 school year, the Non-White student population has increased every year except one. MAXFIELD RESEARCH INC. 17 DEMOGRAPHIC ANALYSIS Overall between the 1 oo0-~ and 2000-01 school years, the White student population decreased by 25 percent (-740 students), while the Non-White student population increased by 144 percent (+435 students). Hispanic students are the fastest growing student population in the Columbia Heights school district, accounting for 18 percent of the overall student population by the 2003-04 school year. These school enrollment trends reveal that the population of Columbia Heights is also growing more diverse, indicating that the facilities at a new community/recreation must appeal to a wide variety of users to be successful. Neighboring School Districts The three neighboring school districts contained in Table 5, like Columbia Heights, have also grown more diverse. Moundsview, the largest school district analyzed, added about 370 students during the 1990s (+3 percent), and yet has lost almost 1,000 students since 2000 (-8 percent). St. Anthony's school district is the only one to have added students during the 1990s and so far this year. MAXFIELD RESEARCIt INC. 18 DEMOGRAPHIC ANALYSIS TABLE 5 SCHOOL ENROLI2VIENT BY RACE/ETHNICITY COLUMBIA HEIGHTS AREA SCHOOL DISTRICTS 1990-2004 l¥c r ! N°- eot. I No. ect__. eot. No. eot. No. eot. No. Pct. , 90-91 50 2% 112 3% 104 3% 37 1% 303 9% 3,020 91% 3,323 91-92 58 2% 114 3% 116 4% 45 1% 333 10% 2,957 90% 3,290 92-93 66 2% 111 3% 130 4% 55 2% 362 11% 2,882 89% 3,244 93-94 89 3% 114 4% 133 4% 79 3% 415 14% 2,644 86% 3,059 94-95 99 3% 118 4% 128 4% 76 3% 421 14% 2,583 86% 3,004 95-96 91 3% 103 3% 158 5% 103 3% 455 15% 2,561 85% 3,016 96-97 90 3% 135 4% 195 6% 105 3% 525 17% 2,508 83% 3,033 97-98 [. 82 3% 128 4% 217 7% 77 3% 504 17% 2,498 83% 3,002 98-99 95 3% 146 5% 262 9% 75 2% 578 19% 2,489 81% 3,067 99-00 106 4% 157 5% 268 9% 105 3% 636 21% 2,380 79% 3,016 00-01 115 4% 176 6% 301 10% 146 5% 738 24% 2,280 76% 3,018 01-02 113 4% 190 6% 409 13% 177 6% 889 28% 2,271 72% 3,160 02-03 111 4% 188 6% 470 16% 227 7% 996 33% 2,034 67% 3,030 03-04 98 3% 207 7% 526 18% 300 10% 1,131 38% 1,840 62% 2~971 90-91 32 1% 85 3% 35 1% 59 2% 211 8% 2,353 92% 2,564 00431 58 2% 109 4% 178 7% 57 2% 402 16% 2,152 84% 2,554 03434 69 3% 191 7% 347 13% 83 3% 690 27% 1~891 73% 2~581 90-91 88 1%0 493 4% 138 1% 104 1% 823 7% 10,544 93% 11,367 00-01 132 1% 718 6% 459 4% 250 2% 1,559 13% 10,177 87% 11,736 03-04 106 1%1 765 7% 547 5% 292 , ~% 1,710 16% 9,054 84% 107764 90-91 5 1% 43 4% 17 2% 15 2% 80 8°A 912 92% 992 00-01 27 2% 111 7% 70 5% 25 2% 233 15~A 1,309 85% 1,542 03-04 19 1% 131 8%i 81 5% 50 3% 281 17%' 1~364 83% 1~645 90-00 No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. ~4o. Pct. 65 130% 64 57% 197 189% 109 295% 435 144% -740 -25% -305 -9% 00434 -17 -15% 31 18% 225 75% 154 105% 393 53% -440 -19% -47 -2% ,Iglm - 90-00 No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. 26 81% 24 28% 143 409% -2 -3% 191 91% -201 -9% -10 0% 00-04 11 19% 82 75% 169 95% 26 46~ 288 72% -261 -12% 27 1% ~gll i~ll I fl&%l~mJ 90-00 No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. !No. Pct. 44 50% 225 46% 321 233% 146' 140% 73~ 89% -367 -3% 369 3% 00-04 -26 -20% 47 7% 88 19% 42 17% 151 10% -1~123 -11% -972 -8% l~mimra~ .... 90-00 No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. ~o. Pct. No. Pct. 22 440% 68 158% 53 312% 10 67% 153 191% 397 44% 550 55% 00-04 -8 -30% 20 18% 11 16% 25 100% 48 21% 55 4% 103 7% Source: MN Dept. ofEduc, ation MAXFIELD RESEARCH INC. 19 DEMOGRAPHIC ANALYSIS Household Type As with age distribution, the trends in types of households have an impact on the demand for different community or recreational opportunities. Table 6 presents data on the types of households in the Columbia Heights Market Area in 1990 and 2000. Family households include married-couple families with children (so-called "traditional" families), married couples without children (mostly empty nesters, but also young married couples without children), and other- family households (single parents and unmarried couples with children). Non-family households include people living alone and roommates (unrelated individuals living together, including unmarried couples without children). The following are key findings from the table: In 2000, there were a total of about 34,000 family households in the Total Market Area, including 10,100 married couples with children, 15,634 married couples without children, and 8,280 other families. Married couples without children include empty nesters, who increasingly desire community and social programs, and younger couples without children, who are also a primary market for recreational services. Married couples w/th children and other families, which include single parents and unmarried couples with children, are primary markets for programs targeted towards parents and children. Community centers with swimming pools oiten attract a large number of family users. During the 1990s, the only growth among family households in the Total Market Area was among other families, which grew by 11.5 percent (+855 households), while manqed couples with children, declined by- 17.9 percent (-2,206 households) and married couples without children declined by -711 households (-4.3 percent). There were about 21,600 non-family households in the Total Market Area in 2000. This includes 16,855 people living alone and 4,767 roommate households. People living alone was the fastest growing household type during the 1990s, increasing by 31.2 percent (+4,010 households). These households comprise 30 percent of the overall households in the Total Market Area and 35 percent of Columbia Heights' households in 2000. Of the total number of households living alone in Columbia Heights, 45 percent are over age 65 (1,225 households). This represents 51 percent of Columbia Heights' households 65 and over. Households 65 and over make up 30 percent of the total households in Columbia Heights, indicating that a new community center should provide programming targeted to older households who may be very pr/ce sensitive. Roommate households consist of unrelated people living with each other to share housing costs and also unmarried couples without children, among others. These people also tend to be younger and are a target market for a recreational facility. As these households tend to be price sensitive, a membership program with cost savings should be targeted to students or roonmkqtes (like a dual membership). MAXFIELD RESEARCH INC. 20 DEMOGRAPHIC ANALYSIS Household Income Household income data helps ascertain the different types of households in an area. Generally, households with higher incomes tend to be target markets for health and community centers. According to IHRSA 20 percent of households that belong to a health club earn an income of greater between $50,000 and $74,999, while 49 percent of households with memberships earn an income of $75,000 and over. Tables 7 and 8 show household income data for the Columbia Heights Market Area in 2004 and 2009, respectively. Household income data was compiled by Claritas, Inc. (a nationally recognized demographics firm) and adjusted by Maxfield Research Inc., based on local household projections. The median household income in the Primary Market Area in 2004 is estimated to be about $44,700, while the Secondary Market Area has a 2004 estimated median income of about $57,500. According to the Department of Housing and Urban Development, the 2004 median income for a household of four in the Twin Cities Market Area is $76,400. Households ages 35 to 44, 45 to 54, and 55 to 64 have the highest estimated median incomes in each submarket. In the Primary Market Area in 2004, households age 35 to 44 have an income of about $52,000; households age 45 to 54 have an income of about $57,000, while households age 55 to 64 have a median income of about $53,000. Younger senior households typically have a higher median income than older senior households, because a greater percentage of younger seniors are still working or are two- person households). Seniors in the Primary Market Area have a median income of $32,800 (age 65 to 74) and $24,500 (age 75 and over). Many of these households are on fixed incomes and are very price sensitive. Therefore entrance fees and membership fees should be discounted for area seniors. The Primary Market Area's median household income is expected to increase to about $48,000 in 2009, while the Secondary Market Area's 2009 median household income is estimated to be $60,800. MAXFIELD RESEARCH INC. 22 DEMOGRAPHIC ANALYSIS TABLE 7 HOUSEItOLD INCOME BY AGE OF HOUSEHOLDER COLUMBIA ItEIGItTS MARKET AREA (~nmber of Households) 2OO4 Total 15-24 25-34 35-44 45-54 55-64 65-74 75+ Less than $15,000 3,400 356 341 458 354 427 501 963 $15,000 to $24,999 3,715 339 448 463 421 278 626 1,140 $25,000 to $34,999 4,738 335 939 917 663 542 661 681 $35,000 to $49,999 5,606 468 1,126 1,160 1,105 715 471 561 $50,000 to $74,999 6,248 278 1,365 1,519 1,174 943 506 463 $75,000 to $99,999 3,791 117 779 890 976 625 268 136 $100,000 or more 3,492 64 498 833 1,053 639 257 148 Total 30,990 1,957 5,496 6,240 5,746 4,169 3,290 4,092 Total 15-24 25-34 35-44 45-54 55-64 65-74 75- Less than $15,000 1,93'8 153 283 268 263 184 :~72 515 $15,000 to $24,999 2,081 88 306 233 253 240 325 636 $25,000 to $34,999 2,863 288 456 44~. 386 383 464 442 $35,000 to $49,999 4,359 390 776 917 795 624 548 309 $50,000 to $74,999 6,211 361 1,151 1,417 1,332 1,043 611 296 $75,000 to $99,999 3,943 110 553 931 1,101 874 267 107 $100,000 or more 4,795 68 366 909 1,563 1,484 296 109 Total 26,190 1,458 3,891 5,119 5,693 4,832 2,783 2,414 Median Income Total 15-24 25-34 35-44 45-54 55-64 65-74 75+ Less than $15,000 5,338 509 624 726 61'-'--'~ 611 773' 1,478 $15,000 to $24,999 5,796 427 754 696 674 518 951 1,776 $25,000 to $34,999 7,601 623 1,395 1,361 1,049 925 1,125 1,123 $35,000 to $49,999 9,965 858 1,902 2,077 1,900 1,339 1,019 870 $50,000 to $74,999 12,459 639 2,516 2,936 2,506 1,986 1,117 759 $75,000 to $99,999 7,734 227 1,332 1,821 2,077 1,499 535 243 $100,000 ormom 8,287 132 864 1,742 2,616 2,123 553 257 Total 57,180 3,415 9,387 11,359 11,439 9,001 6,073 6,506 Median Income Source: Claritas, Inc.; Maxfield Research, Inc. MAXI~ RESEARCH INC. 23 DEMOGRAPHIC ANALYSIS TABLE 8 HOUSEHOLD INCOME BY AGE OF HOUSEHOLDER COLUMBIA HEIGHTS MARKET AREA 0N,,mher of Households) 2OO9 : ~ : : i ......~ ~e 0f Household~ Total 15-24 25-34 35-44 45-54 55-64 65-74 75+ Less than $15,000 3,136 344 293 390 327 402 '440 94C $15,000 to $24,999 3,452 286 327 470 473 221 618 1,057 $25,000 to $34,999 4,434 291 864 677 597 462 587 956 $35,000 to $49,999 5,775 488 1,121 1,035 900 940 703 588 $50,000 to $74,999 6,209 384 1,2958 1,388 1,338 1,023 473 345 $75,000 to $99,999 4,427 133 1,005 1,067 928 840 275 179 $100,000 or more 4,647 111 716 1,011 1,421 879 331 178 Total 32,080 2,037 5,584 6,038 5,984 4,767 3,427 4,243 Median Income Total 15-24 25-34 3544 45-54 55-64 65-74 75+ Less than $15,000 $15,000 to $24,999 1,926 $25,000 to $34,999 2,601 $35,000 to $49,999 4,575 $50,000 to $74,999 6,039 $75,000 to $99,999 4,402 $100,0130 or more 5,681 1,806 147 239 234 243 185 253 505 70 260 192 223 214 323 644 211 335 374 315 426 383 557 381 812 875 860 660 624 363 391 1,047 1,268 1,286 1,049 648 350 163 634 956 1,145 1,021 312 171 112 571 1,091 1,986 1,418 350 153 Total 27,030 1,475 3,898 4,990 6,058 4,973 2,893 2,743 Total ~ess than $15,000 4,942' $15,000 to $24,999 5,378 $25,000 to $34,999 7,035 $35,000 to $49,999 10,350 $50,000 to $74,999 12,248 $75,000 to $99,999 $100,000 or more 15-24. 25-34 3544 45-54 55-64 65-74 75+ 491 532 624 57~ 5~ '693' 1,445 356 587 662 696 435 941 1,701 502 1,199 1,051 912 888 970 1,513 869 1,933 1,910 1,760 1,600 1,327 951 775 2,305 2,656 2,624 2,072 1,121 695 8,829 296 1,639 2,023 2~073 !~861 587 350 10,328 223 1,287 2,102 3,407 2,297 681 3311 · 3,?i 6,3- 6,9861 Total Median Income Source: Claritas, Inc.; Maxfield Research, Inc. Annual Expenditures on Club Membership Dues/Fees Table 9 shows the annual expenditures on club memberships and recreational activities in the Columbia Heights Market Area in 2004 and 2009. Ciaritas, inc., a nationally recognized MAXFIELD RESEARCH INC. 24 DEMOGRAPHIC ANALYSIS demographics/statistics fn'm, collected this data. The following points highlight the findings from this data~ It is estimated that a total of $8.4 million will be spent during 2004 on club membership dues/fees and recreational activities (excluding admissions to events) in the Primary Mm'ket Area. This translates to an average of $1,348 annually per household ($112 per month) or $595 per capita annually ($50 per month) in the Primary Market Area. In the Secondary Market Area, it is estimated that $9.5 million will be spent during 2004 on memberships and recreational activities. This equates to an average of $1,809 per household annually ($151 per month) or $709 per capita annually ($59 per month). TABLE 9 ANNUAL EXPENDITURES ON RECREATIONAL ACTIVITIES* COLUMBIA HEIGHTS PRIMARY AND SECONDARY MARKET AREA 2004 & 2009 Total Per Capita Avg. Hrl Total Per Capita Avg. HH Primary Market Area Club Membership Dues/Foes $3,285,000 $234 $530 $4,598,000 $318 $717 Foes for Participant Sports $2,934,000 $209 $473 $3,166,000 $219 $493 Fees for Recreation L~ssons $2,137,000 $152 $345 $2,829,000 $196 $441 Subtotal $8,356,000 $595 $1,348 $10,593,000 $733 $1,651 Admission Fees to Sporting Events $4,040,000 $288 $652 $5,035,000 $348 $785 Secondary Market Area Club Membership Dues/Fees $3,668,000 $274 $700 $5,160,000 $386 $954 !Fees for Participant Sports $3,018,000 $226 $576 $3,305,000 $247 $611 Fees for Recreation Lessons $2,790,000 $209 $533 $3,630,000 $272 $671 Subtotal $9,476,000 $709 $1,809 $12,095,000 $905 $2,237 Admission Fees to Sporting Events $4,330,000 $324 $827 $5,472,000 $409 $1,012 *Adjusted to include 20% of total households. Sources: Claritas, Inc.; Maxfield Research, Inc. By 2009, the tot~ expendit,~e on club mem3ership dues/fees o~ re~eationa! ~ti,~, lies in the PMA is expected to increase to $10.6 million or an average of $1,651 per household and $733 per capita annually. In the SMA, it is estimated that a total of $12.1 million will be spent on memberships/activities for an average of $2,237 per household and $905 per capita annually. In 2004, Primary Market Area residents are expected to spend $3.3 million on club membership dues or fees. This equates to an average of $530 per household annually or about $44 per month. In the Secondary Market Area in 2004, residents will spend about $3.7 million on membership fees or $700 per household annually ($58 per month). MAXFIELD RESEARCH INC. 25 CURRENT MARKET ANALYSIS Introduction Maxfield Research Inc. analyzed the current market situation by surveying existing public and ~;L ate health and fitne'ss clubs in the Market Area and selected city-owned community centers in the Twin Cities. The purpose of the survey was to assess usage, membership dues and fees, and facilities and amenities at heakh and fitness clubs in the Market Area that would be competitive with the proposed community center in Columbia Heights. The following tables present information on Market Area health and fitness clubs as well as information on selected community centers throughout the Metro Area. The following discussion summarizes information from the tables and key points from our survey of these facilities. At the conclusion of this section, we discuss the potential impact of these competitive developments on the current market situation and a potential recreation center in Columbia Heights. Public and Private Health and Fitness Clubs There are six privately owned health and fitness clubs in the Primary Market Area. Of these, five are either a Curves for Women or a Ladies Workout Express. These clubs are marketed at 30-minute circuit training facilities that are only for women. Typically, the clubs locate in spaces of less than 2,000 square feet and have fewer than 400 members. These clubs would not be directly competitive with a new community center in Columbia Heights, although their target market does overlap with that of a community-owned recreation center. There are also three Curves for Women in the Secondary Market Area, as well as an It Figures, another women-only circu/t-training facility. These clubs are not contained in our Tables of competitive product, although we do account for them in our demand calculations in the following section. The following points highlight our analysis of the competitive facilities in the Primary and Secondary Market Areas. Private Clubs Excluding the women-only facilities, there is only one health club in the Primary Market Area that would be competitive with the proposed community center in Columbia Heights. This facility, Fitness Crossroad, opened in 2001 and is privately owned by a St. Anthony resident. The YMCA has a community program site in Northeast Minneapolis. This site offers educational programs and meeting space for community groups, but does not have a fitness or recreation facility. This facility is affiliated with the YMCA in Coon Rapids, which is located outside of the Secondary Market Area. There are four competitive privately-owned facilities in the Secondary Market Area. These facilities include a Bally's and Northwest in Fridley, a women-only Lifetime in Roseville and The Gym, Inc. in Fridley. Members of Bally 's, Northwest, Lifetime, Yg4CA and YWCA can access all of their respective facilities in the Twin cities and Nationwide. [] The following shows the number of health clubs in the Twin Cities Metro Area by chain: MAXFIELD RESEARCH INC. 26 CURRENT MARKET ANALYSIS o Bally's: 8 o Lifetime: 14 o Northwext: 10 o YMC;L 19 (Including 2 in Hudson, River Falls, WI) o YWCA: 3 Marketing coordinators at the clubs indicated that demand for fitness club memberships is strong in the Secondary Market Area. The larger clubs believe that they have a draw area of eight to ten miles for members. Also, the clubs with more than one location often draw members from other clubs for different reasons. For instance, Lifetime in Roseville draws women from clubs all over the Metro Area, as it is the sole women's only club in the chain in the Metro. Annual membership dues (based on quoted monthly rates) for adults range from $300 to $720 per year. Family memberships average about $1,070 per year. Family memberships at Northwest and Lifetime vary depending on the number of people and can be more expensive (about $50 for each additional person). Daily admission for walk-in users of competitive health and fitness clubs range from $5 to $30. Bally's and the YMCA's do not admit non-members unless they are with a club member. Most of the clubs require at least a one-year contract, while the YMCA requires a 15-day notice on a month-to-month membership. Three of the clubs have a pool. The Lifetime representative in Roseville indicated that most members are not interested in having a pool, and if they are, they can go to any other Metro Area club. The Northwest in Fridley and the YMCA in Coon Rapids have the most amenities of all of the facilities in Table 10. The YMCA is the only facility to offer a climbing wall, while Northwest offers racquetball, tennis and squash courts. Other club representatives indicated that rock-climbing walls are becoming a popular amenity at clubs throughout the Twin Cities and many newer clubs are beginning to incorporate them Other popular club features include the availability of personal trainers for one-on-one instruction and assistance with fitness activities. Health education programs are also held periodically at most of the clubs. Lifetime, Northwest and the YMCA have partnerships with health insurance providers, where members who use the facility a certain number of times a month receive a reimbursement for a portion of their monthly membership fee. One representative of a local health club indicated that this program has helped to increase member's monthly attendance, as well as sell memberships, as potential members see this as a significant cost savings. MAXFIELO RESEARCH INC. 27 CURRENT MARKET ANALYSIS TABLE 10 FEATURES/AMENITIES COMPARISON COMPETITIVE ItEALTH CLUBS AND COMMUNITY CENTERS COLUMBIA HEIGHTS MARKET AREA Not in the MA Competitio,,n~p Pool .4 .4 Therapeutic Pool Children's Pool/Slides .4 .4 I~vi~6 Whirlpool .4 .4 .4 .4 Aerobics/Dance Area .4 .4 .4 .4 .4 .4 .4 Walk/Running Track .4 .4 .4 q .4 .4 .4 .4 .4 uash .4 FeesIHr. $55 $30 $55-$85 Health/Community Edue. Rock Climbing Wall .4 Meeting Rooms .4 .4 .4 .4 .4 .4 .4 Non-Member Fees/Hr. $30 $25 $25 $20-$100 Children's/Youth Program Blast Teen Center .4 Eagle~s All day Chad Car~ .4 .4 .4 .4 .4 Nest Pre-school Fees/Hr. Free $3.50-$4.00 Frae $4.75 $3.25Par. i Some: Maxfield Research~ Inc. , Market Area Community Centers A new community/recreation center in Columbia Heights would likely be most similar to existing community centers in the Market Area. These centers differ from most of the private clubs profiled in Table 1 O, in that, they have one location, are not privately owned and are typically run in conjunction with the community school or parks and recreation department. These centers are outlined below in the following points. [] There are two community centers in the Primary Market Area, the New Brighton Family Service Center and the St. Anthony Community Center. The only community MAXFIELD RESEARCH INC. 28 CURRENT MARKET ANALYSIS center in the Secondary Market Area is the Moundsview Community Center. We also included an analysis of the Shoreview Community Center, as it is the nearest large community center. The Family Service Center in New Brighton was built in 1995 and offers a fitness area, gymnasium and a children's play area called Eagle's Nest. The gym is only for use of members and is not rented out or contracted out to local schools. The St. Anthony Community Center was built in about 1998/99 in conjunction with the new city hall. This facility offers a gymnasium, day care, meeting rooms and center for senior activities. The sports boosters offer games and sports activities, as well as adult leagues, yoga classes and community education. The Moundsview facility was built in 1998. This facility does not offer memberships and is used during the day by school groups and other community groups. This facility offers a gym with two full courts and bleachers, locker rooms, small weight room with a few aerobic machines, a play area with a pool table and foosball. A private day care is operated next to the facility. None of the centers in the Market Area offer pools. Outside of the Market Area, the Shoreview facility offers an indoor water park, Tropics. The Shoreview center was originally built in !989; last May (2003), a fitness center, two aerobic rooms,. additional banquet facilities and a boardroom were added. Up until that point, according to a manager, the center had about 1,500 members. After adding the fitness center, the memberships increased to about 2,200. The weekends are the busiest times, as the indoor water park draws users l~om all of the Metro. According to the manager, about 700 people use the facility every day during the week, and about 1,300 come on the weekends. Total Market Area Memberships The following table summarizes the number of memberships in the PMA and SMA by club type. The Shorevicw Community Center, with 2,200 memberships, is outside of the Market Area and is theremre, not included in this '-'-'- · r L~UIU or in our ~--"-~~.1~..1..1--~ 4~_~ ....1.4~+~.--..~,-~1 ~,-*~.n~a~-oh~o in the Market Area. Primary Secondary Market Market Area Area Private Clubs 1,000 11,200 Community Cemers 750 0 Curves/Women's Only Clubs . Total Memberships 1,375 1,250 3,125 12,450 MAXFHgLD RESEARCH INC. 29 CURRENT MARKET ANALYSIS Selected Metro Area Community Centers Maxfield Research Inc. also inventoried selected community centers in the Metro Area. These facilities were analyzed for comparison purposes only. Because they are located outside the geographic Market Area, they would not be competitive with a new facility in Columbia Heights. The information gathered on the selected community centers is meant to illustrate the range of facilities available in other communities, as well as typical membership fees. Table 11 contains information on five Twin Cities' community centers including Shoreview. The following points highlight our analysis of the selected community centers. Of the five community centers, The Grove in Inver Grove Heights is the largest. It offers an indoor water park and full aquatic center, as well as an ice arena and a skate park. [] The Eagan Community Center is the only facility without a pool. [] The facilities in Chaska and Maplewood offer performing arts theaters. All of the facilities offer gymnasium space, fitness areas and walking/running tracks. TABLE 11 FEATURES/AMENITIES COMPARISON METRO AREA COMMUNIlW/CENTERS CITY OF COLUMBIA HEIGHTS b [Vool ........ Children's Pool/Shdes Sam~Ste~oom ~u~b~l ~eater Source: Ma~eld Research, [] The community centers shown in Table 11 tend to have an equal amount or sometimes more features and amenities compared to the private health and fitness clubs shown in MAXFIELD RESEARCH INC. 31 CURRENT MARKET ANALYSIS Table 10. While the fitness and court areas are similar at the corrauunity centers and the heaklv' fitness clubs, what differentiates the community centers fi.om the private health/fitness clubs/s their aquatic facilities. Communky center pools tend to emphasize family swimming facil/ties and often include a variety of unique amen/ties such as waterslides, mushroom showers, and water-walks. Other amenities at cornmunky centers that are not typically found at private health clubs include banquet and meeting spaces. Some of the private clubs have meeting rooms, but they are typically reserved only for members. Maplewood and Chaska Conmiun/ty Centers also have performing arts theaters, where community events such as concerts and plays are held regularly throughout the year. The Shorev/ew Community Center has an outdoor skateboard and inline skating park. Passes are $2.00 for a youth and $3.00 for an adult. All of the facilities also offer childcare. According to a representative in Inver Grove Heights, their full-time day care facility has helped to attract members. Members receive a discount on childcare at the facility. The Shoreview facility only offers childcare for members while they are using the club. According to a representative, the childcare does not pay for itself, as they only charge members $3.00 per hour. Membership Dues and Daily Admission Prices Tables 12 show the annual membership dues and daily admission prices at the public and private health clubs, as well as the selected community centers. The following points highlight this analysis. For the Family Service Center in New Brighton, the annual mernbership fees range fi.om $130 for a resident youth to $435 for resident families. Non-res/dent membership dues range fi.om approximately 20% to 60% more than res/dent dues. Memberships are not available at the Moundsview center. Daily fees are ar>om $5.00 per pc, son at New Brighton and are the same for residents and non-residents. At Moundsv/ew, residents pay either $1.00 (youth) or $2.00, while non- residents pay $3.00 and $5.00 per visit. As shown in Table 12, membership fees among Metro Area community centers vary by each center. Overall, the average membership fee for resident aduks is $37 per month on a month to month payment plan or $315 per year annually ($26/per month). " On average, non-resident membership fees are 26 percent higher than resident membership fees. MAXFllgLD RESEARCH INC. 32 CURRENT MARKET ANALYSIS Membership dues and walk-in admissions at the Chaska Community Center are substantially less expensive compared to the other community centers shown. The Grove at Inver Grove Heights has the highest membership fees, while Maplewood tends to have the highest walk-in admissions among the centers. Typically youth and senior rates are the same at the centers that offer these rates. Chaska and Shoreview do not charge enrollment fees. A representative at a local community center indicated that enrollment fees are crucial for covering upfront costs related to the administrative tasks involved in enrolling new members and suggested that all new community centers include them Memberships tend to be less expensive at the selected community centers compared to the privately owned health and fitness clubs, especially for resident families. Of the private health clubs, Northwest has the highest membership fees overall. The median membership fee overall is between $34 and $45 per month for an adult, which is comparable to the community centers profiled, but lower than the YMCA and Northwest. Pending Community Centers and Health/Fitness Clubs Maxfield Research Inc. interv/ewed a staff member from the cities in the Pr/mary Market Area to determine if a community or recreation center is planned. The only pending project is the Salvation Army Kroc Center. Five cities in Minnesota have applied for $12 Million to fund the development of a community, recreation, education and performing arts center. The five Minnesota cities are competing against communities in other states in the Midwest; there is no indication at this point that a Kroc Center will be built anywhere in Minnesota. Components of a Salvation Army/Kroc Center: Family Service Center Head Start/Child Development Center Holiday Food/Toy Distribution Center [] Recreation Field: Soccer, Flag Football, Lacrosse, Walking Track [] Challenge Course: High/Low Rope Elements, 30-foot tall Climbing Tower [] Gymnasiurrr Basketball, Volleyball, Badminton, Youth/Adult Sports Leagues Fitness Area: Kickboxing, Personal Training, Weight Training, Aerobics, Pilates, Yoga Conditioning [] Recreation Room: Air Hockey, Billiards, Table Tennis, Foosball, Board Games ~ Ice Area: Public Skate, Youth/Adult Hockey Leagues, Skating Lessons, Freestyle Skating MAXFIELD RESEARCH INC. 34 CURRENT MARKET ANALYSIS Aquatics: 25-meter Competkion Pool, Recreation Pool, Therapy Pool, Lap Swim, Swim Lessons, Aquatic Exercise, Adult Water Polo Leagues ' Performing Arts Center: 600-seat Theater, Vocal/Instrumental Practice Rooms, Dance Studio, V/sual Art Studio [] Education Training Center: Intemet-based Library, Fireside Reading Room, Computer Lab, Classrooms Minneapolis was among the five cities that submitted an application for the project. According to the public relations firm who submitted the application on behalf of Minneapolis, potential sites for the center are in North and Northeast Minneapolis. A decision on the five applications from Minnesota is expected in April of 2005. If the Kroc Center was built in Minneapolis, it would be directly competitive with a new conmiunity/recreation center in Columbia Heights. Other than the pending Salvation Army/Kroc Center, there are no pending or planned conmiunity or recreational facilities in the Columbia Heights Market Area. MAXFIELD RESEARCH INC. 35 DEMAND ASSESSMENT AND CONCLUSIONS Demand Assessment In this section, we calculate demand for health/fitness club memberships in the Columbia Heights Primary Market Area and project membership and usage (including members and walk- in users) for a potential new center in Columbia Heights. Table 13 shows our demand calculations for 2005, 2010 and 2015, based on the estimated Market Area population, the propensity of people to join health/fitness clubs and average annual usage per member, derived from industry statistics compiled by the International Health and Racquet Sportsclub Association (IHRSA). The following points summarize our demand methodology shown in Table 13. 2005 calculations would indicate existing or pent-up demand for a new community center in the area, while demand for 2010 and 2015 indicate future demand. The following discussion prov/des an analysis of the future demand, as a new community center is likely to be built after 2005. In 2010, the Pr/mary Market Area is estimated to have 72,700 residents. According to the IHRSA/American Sports Data Health Club Trend Report, 12 percent of the Nation's population is members of health/fitness facilities. A local community center interv/ewed for this study indicated that they estimate that 13 percent of local residents join a health center. Applying 13 percent to the local resident base, there are an estimated 9,440 potential members in the Primary Market Area. Next we subtract the number of members at the Curves and Ladies Workout Express clubs in the Primary Market Area (less 15 percent to account for transfer of memberships). This results in an estimated 8,300 potential members of health centers in the PMA in 2010. Next, we adjust the estimated number of members to reflect memberships, since nearly all facilities offer family memberships. Based on the current membership base at selected community centers throughout the Metro Area, we estimate an average of 2.3 members per membership. This results in about 3,600 potential memberships in the Primary Market Area. Char reqearr,h r~xr~alecl 9 fret91 rn~rnh~-'oh~n base '-~' in the Primary Market Area. Subtracting these memberships (less 15 percent to account for transfer of memberships from competitive facilities) resuk in excess demand for about 2,100 memberships in the PMA in 2010. We should note that this demand calculation may underestimate some potential members, as some people who are currently members of other facilities in the area (especially Columbia Heights residents) would choose to purchase memberships at a new facility in Columbia Heights for a variety of reasons -- it may be closer to their home or work, the facility would be newer and/or preferable to their current club, and/or the membership rates are less expensive. ~LD RESEARCH INC. 36 DEMAND ASSESSMENT AND CONCLUSIONS TABLE 13 PROJECTED ANNUAL 1VIEMBERSHEPS AND I~TAL USAGE COLUMBIA BEIGItTS COMMUNIrY CEBFrER 2010 & 2915 Prinmry Mail,et Area Population 70,700 72,700 74,200 (limm) Pe~ent that join health/illness faofliti~ ~ 13% x 13% 13% 13% (equals) Estimated potential memben in thc PMA = 9,191 9,451 9,646 (minus) Existing memberships at Curves/LWE in PMA 1 ? 169 1 r169 1 ~ 169 (equals) Estimated potential members in PMA = 8,022 8,282 8,477 (divided by) Eaimated 2.3 membevdmember~hip at conmamity centerPacalth club /' 2.3 2.3 2.3 (equals) Estimated potential memberships for eonnmm/ty center/health club = 3,488 3,601 3,686 (minus) Existing memberships at eommanity eentergaealth clubs in PMA 1,488 1~488 1~488 (equals) Excess demand for memberships fur community centerfhealth club in PMA = 2?000 27113 2r198 [plus) Demand from Housel~lcls outside of the PMA + i 25% 25% (equals) Demand fur new health center in PMA = 2,501 2,642 2,748 [times} Estimated eaptme ~ato for new eeaterin Columb/a Heights x 15% - 20% 15% - 20% 15% - 20% (times) Average number of member visits mmually x 92 92 92 (equals) Estimated mmmfl visits by membtas = 34,500 - 46,000 36,800 - 48,760 37,720 - 50,560 (plus) Walk-in users ~ 75 (,W. l~to95(},r. 5)pur&[x360da[sp~r~,e~r + 27?000 27,000 34~00 Somme: Max~eld Rcsemch~ Inc. We believe that a new facility in Columbia Heights (without a pool) could capture 15 to 20 percent of the demand for health/fitness club memberships in the PMA. This resuks in a projected annual membership at a new center in Columbia Heights of 400 to 530 memberships in 2010. Following this same calculation for 2005 results in existing demand for 375 to 500, indicating that a new community center must be designed to meet the needs of existing PMA households. Following this same calculation for 2015, results in demand for 410 to 550 memberships in Columbia Heights. According to IHRSA statistics, health club members visit their facility an average of 92 days per year. In 2010, this corresponds with an estimated 36,800 to 48,760 annual visits by potential members in Columbia Heights. We add an estimated 27,000 walk-in users in year one, an average of 75 per day, for a total projected usage of 63,800 to 75,760 in 2010. Applying the same methodology in 2015 results in 37,720 to 50,560 visits by members and 34,200 walk-in users, for a total projected usage of 71,920 to 84,760 visits in 2015. For 2015, we have estimated an average of 95 walk-in users per day, compared to 75 per day in MAX17IELD RESEARCH INC. 37 DEMAND ASSESSMENT AND CONCLUSIONS 2010. We believe an increase in usage by walk-in users will occur as the facility has marketed for a longer period of time. Conclusions Based on our demand calculation, we believe that sufficient demand exists to support a new community/recreational facility in Columbia Heights. Because there is a significant supply of privately owned health clubs in the Secondary Market Area, we recommend developing a community center concept that is targeted to local households' needs. Demographic Indicators Some notable demographic shifts are occurrhig in Columbia Heights and the surrounding area~ First, the majority of the population is aging in place. This is happening in most inner-ring communities in the Metro Area. Communities like Columbia Heights want to continue to attract younger families and see reinvestment in their existing housing stock. As shown in the school enrollment data, the area is attracting a diverse younger population, which illustrates the second demographic shift. These shifts are creating an opportunity for a new community and recreational facility to provide programs and amenities that will appeal to a wide variety of community users such as: ' Older adults: will be price sensitive and desire a friendly environment exercise in. Younger immigrant families: Different ethnic groups value exercise differently. Some groups do not allow women to exercise in the same facility/room as men, while others do not hold exercise as an important activity. Young non-immigrant families: As housing options become available for older households, their existing single-family homes can become available for young families, who are either buying an entry-level home or moving up into something larger as their housing needs change. These families are price sensitive and will be attracted to the relatively affordable home values in Columbia Heights. Single aduks or couples without children: These people will be attracted to the new housing product that is pending in Columbia Heights, as well as the Apache Plaza site in St. Anthony. This group will also be price sensitive regarding membership fees, but will primarily value the convenience of a health club nearby. MAXleIELD RESEARCH INC. 3 8 DEMAND ASSESSMENT AND CONCLUSIONS Recommended Amenities We recommend incorporating the following amenities and features to attract local households to the new facility. Gymnasium space: two full court gymnasiums that will be used for youth and adult league basketball, in addition to other groups; A walking/nmning track should be included either level with the gymnasium area or we recommend that an elevated track be built above the gym floor. Fitness Area: including aerobic machines (jogging, steps or elliptical), weight machines, free weights, stretching area and TVs. Aerobic studios: for group fitness classes. We suggest providing flee classes for members, as well as allowing non-members to take classes for a fee. Classes targeted to different age groups: young adults (i.e. kickboxing, pilates, yoga), older adults (i.e. dancing classes, games), children and parents .with children. Also, cons/der incorporating classes targeted to different ethnic groups. Childcare play area: we suggest including an area that can be rented out for birthday parties and other events, similar to New Brighton's Eagle's Nest. If possible, also include full day care on the Site, either as part of the center or separate and offer a discount for members. [] Senior Center: a room/area for activities and meals for senior groups, members and non-members. Teen Cemer: small activity room with a pool table, or foosball, air hockey or other amenities that will appeal to teenagers. Concessions area: We recommend a centrally located concessions area that would be available to members and to guests attending special events. The concessions area could serve snacks and beverages, but would not serve meals unless pre-prepared. Concessions would also service small meetings at the community center with limited refreshments. Some examples of unique amenities included in facilities throughout the country are: A golf practice room or simulator, A police precinct; · Arts and cratts area with kilns; and [] Performing arts stage. MAXFIELD RESEARCH INC. 39 DEMAND ASSESSMENT AND CONCLUSIONS We do not recommend including an aquatic center. Our demand calculations were based on a facility with fitness areas and gymnasium space, excluding a pool. While a pool attracts some members, people not interested in using it, will not want to pay for it. Therefore a facility without a pool and with a lower annual membership fee, will attract potential members who are price-sensitive. As the incomes in the Market Area tend to be lower than the incomes of people attracted to large facilities with a wider variety of amenities, we believe that the potential members in the Market Area will be concerned that they are getting the most value for their money at a new facility. Health Care Partnership Most of the health clubs and conm~unity centers profiled in this study have parmered with health insurance providers to reimburse members a portion of their monthly membership fee if the member Uses the club a certain number of times per month. This reimbursement can often be up to half of the membership fee making it an attractive incentive for members. One representative from a Metro Area community center indicated that the partnership helped to sell more memberships; while another pointed out that it increased member usage of the facility significantly. We recommend providing this incentive for members if possible, as many potent/al members will choose to join a health club with a health insurance reimbursement. Recommended Fee Structure Based on our recommended amenities and features, we have developed a recommended fee structure for the potential community center which is shown in Table 14 below. To attract members who may not be familiar with a health club, we recommend providing free one-week trial memberships so that potential members can become familiar with the facility before joining. TABLE 14 RECOMMENDED FEES FOR POTENTIAL COMMUNITY CENTER CITY OF COLUMBIA H~EIGHTS NOVEMBER 2004 Monthly Fee for Annual Membership Annual Membership Enrollment Fee Walk-in Admission Resident Non Res. Resident Non Res. Resident Non Res. Resident Non Res. Adult $240 - $300 $20 - $25 $50 ~ $75 $6.00 - $8.00 Couple $375 - $425 $31 - $35 $60 - $85 $10.00 - $14.00 Family $425 - $475 $35 - $40 $75 - $100 $18.00 - $22.00 Senior $175 - $200 $15 - $17 $30 - $40 $5.00 - $6.00 Youth $175 - $200 $15 - $17 $30 - $40 $5.00 - $6.00 Source: Maxfield Research, Inc. Throughout our interviews with representatives of local community centers we found that all Metro Area community centers had a budget shortfall that was covered by a variety of funding mechanisms, for example: antenna fees, electric fund or other non-operating revenues, building fund, or the general fund. Anywhere from 2 percent to 41 percent of the community center's MAXFIELD RESEARCH INC. 40 DEMAND ASSESSMENT AND CONCLUSIONS operating budget was not covered by membership fees, while the average budget shortfall was 19 percent. We believe that there is sufficient demand to develop a new community and recreational facility in Columbia Heights. While we recormnend that the facility be designed to meet the needs of the existing aging population in the Primary Market Area, we also recognize that the area is becoming more diverse. Therefore, the facility should be designed as such to meet the needs of a wide variety of users, including new households who will be attracted to the redevelopment sites in Columbia Heights and St. Anthony. A new facility will be supported by existing households, but should also serve as a community amenity that will attract new households into Columbia Heights. A conm~unity and recreational facility often serves as a marketing tool to attract new households, as well as reinvestment in a conanunity. The facility should be designed for future flexibility and should allow for future expansion as the community center space needs will change in the future. Projected Gym Usage Table 15 shows an estimate of gym usage from school groups and other users, both recreational gym users and organized sports groups for Columbia Heights. The table was developed to reflect peak usage during the winter months. Usage during the summer months would be less. In discussions with staff from the High School and from the Columbia Heights Recreation Department, both concurred that there is no additional gym space currently available in the area and that many groups could be using more time if facilities were available. Elementary and Middle School gyms are being used where poss~le to provide some gym time for youth leagues and youth traveling teams although these facilities are small and often place the teams at a disadvantage when competing against teams that are able to have more hours of practice and at facilities where there are full courts available. Option 1 allows for two gyms to be constructed, one at a location near the school and a second gym at the community center. The only benefit to this option is that they school would not have to bus students to utilize the gym space for school classes and school-related activities. If the facility is located away from the school, it is likely that school usage would be limited to only the late afternoon and evening hours, leaving a second gym space available for Open Gym for most of the daytime hours. The disadvantage of this option is that it limits the amount of tournament play that could be attracted to the facility (a potential revenue generator), because tournaments typically prefer to have more than one court. Constructing two separate facilities would also increase costs. With Option 1, we estimate an average usage rate of 85% to 90% for both facilities including school usage. Option 2 would combine the facilities into one location, at the proposed community center. We estimate that the average usage rate for both gyms combined would drop to 60% because we assume that the school would not use the gym during the day for class and sports overflow as it would be too difficuk to bus students back and forth. However, we believe that the school would MAXFIELD RESEARCH INC. 41 DEMAND ASSESSMENT AND CONCLUSIONS utilize gym space at the community center if necessary during after school hours during the winter months when it reaches its capacity for practice space and meet space (games) among various sports groups. At this time, the users that would generate revenue to the facility would be some special events, sports camps, and outside tournament play that would pay to use the facilities. These events would also generate additional revenue to the concessions area. Most of the usage planned for the gyms will come from school groups and from recreational sports users who will not be paying directly to use the facilities. Once these groups are in the facility, they will be using the facility, but not paying additional fees. This may be somewhat problematic for those who will be paying a membership fee yet may not be able to use the gym space when they want to. Note: We acknowledge that there will be a significant amount ofusage of two gyms during the peak winter months. It will be necessary to develop and maintain a priority strategy so that both gyms do not become "over-programmed" during the peak hours of 5pm to 10pm and during the daytime on weekends, thereby excluding a sufficient amount of usage from the general membership who are paying additional fees to use the facility. MAXFIELD RESEARCH INC. 42 DEMAND ASSESSMENT AND CONCLUSIONS TABLE 15 PROJECTED GYM USAGE COLUMBIA HEIGHTS COMMUNITY CENTER November 2004 Projected Peak Usage - Winter Season (October through Mid-March) ,Option 1 - Two Gyms (Two locations) Option 2 - Two Gyms (One Location) 7:00am 8:00am 9:00am Senior Am'. S~nior Aer. Senior Aer. 10:00am 1 l:00am 12:00am ,Tom Floor Con~s/ Men's BB 7:00am School Uso School Use School Use School Use School Use 8:00am School Use School Use School Use School Use School Use 9:00am School Use School Use School Use School Use School Use lO:OOam School Use School Use School Use School Use School Use  School Use School Use School Use School Use School Use School Use School Use School Use School Use School Use School Use School Use School Use School Use School Use Use School Use School Use School Use School Use School Use School Use School Use School Use School Use Games/ Band Cone. Sources: Columbia Heights Park and Recreation; Columbia Heights Schools; Maxfield Research Inc. MAXFIE~ RESEARCH INC. 43 '7 CI'TY OF COLUMBTA HETGHTS FTRE DEPARTMENT TO: FROM: SUB3ECT: DATE: WALT FEHST ASSTSTANT CHTEF GARY GORMAN HOUSTNG MATNTNANCE PROGRAM / /2oo5 Part of my duties when I became Assistant Fire Chief was to look at all aspects of the Residential Maintenance Program. The program is very beneficial to the City but through the years has become very inefficient in the way it has evolved through code, policy, and legal changes. Enclosed is my proposal of an overall policy that will cover licensing and inspections for all property. The goal with this policy is to have one department in charge of all property licensing and maintenance. The only exception would be property that is under a building permit. Once a building permit has expired or is signed off, the property will be maintained by this policy. The one part of our inspection program that is above all others is our inspectors and office staff. The fact that most of our inspectors and staff grew up in this City and some still call Columbia Heights home, shows a true dedication to making this community a better place to live. The inspectors also feel very frustrated with the "system" that is currently in place and all have given valuable input into this document. Policies and procedures on paper are meaningless unless you have a good staff to make it work. We have that good staff. The first part of this change is to look at the cost of running this program. I have gone through our 2004 adopted budget to use as a base. The information provided in regards to time, number of inspections, etc is based off of the year- end totals for 2003. Any changes to our program in the future will cause some of these totals to change. I have mentioned these in the separate budget line item explanations. H:\HMC RMC Final Final Proposal.doc RESIDENTIAL MAINTENANCE CODE OPERATING EXPENSE 1010 Rental Licensing Clerk - $46252.00 $46,252.00 1 OO% 1010 Asst. Fire Chief - 40% $79998.00 $31,999.00 1010 Inspectors - pro-rated $500,300.00 $45,816.00 2000 Office supplies - 50% $500.00 $250.00 2011 Computer Equip. - pro-rated $6000.00 $500.00 2020 Computer Supplies - 40% $800.00 $320.00 2030 Printing - 60% $500.00 $300.00 3210 Telephone 12.5% $4142,00 $518:00 3220 Postage - 80% $3150.00 $2520.00 4000 Copy Machine - 80% $1544.00 $1235.00 ~ TOTAL $645 ;190!00 $129 ;710 !00 1010 -The Clerk Typist duties include: licensing, appointments, phone calls, complaints, inspection paperwork, counsel resolutions, revocations for all residential property under the Residential Maintenance Code. The Assistant Fire Chief oversees the Residential Maintenance Program. Up until the year 2002 this position dedicated at least 80% of their time to this program. In 2003 John Crelly was attempting to reduce this to 50%. It is my goal to have this program run at a level so the Asst. Chief's time is below 50%. The Firefighters time is based on a formula that 2 inspectors on a shift costs $57.27 per hour. There are approximately 209 inspection days a year based on inspections only being performed Monday thru Thursday each week. Less holidays the number is in the 200 to 203 day range. 7 hours of a shift is dedicated to inspections. 4 of the 7 hours statistically are for Residential Maintenance inspections. 4 hours x 200 shifts equals 800 hours. 800 hours x $57.27 per hour equals $45,816.00. With the elimination of many follow-up inspections and a different policy for owner occupied single-family homes the time per shift dedicated to RMC inspections could be reduced. 2011 - The cost of computers, printers, and software are charged to the department. The life of this equipment is pro-rated over 4 years. The other line items are based on a percentage of use that is attributed to the Residential Maintenance Program. As can be seen, the total cost to the City for the Residential Maintenance Program is $111,706.00. This total cost should be divided among the Rental Property owners and the rest of the City is some fashion. In 2003, one third of inspections made were rental property. The other two thirds were owner occupied single-family homes. Based on time involved, rental property consumes closer to 70% of our time due to the fact the inspections take longer and the licensing process also takes time. Inspections of owner occupied single family homes has pumped 1500 to 1800 inspections into our system each spring causing the office to be 3 to 5 weeks behind by the end of the summer. This is not acceptable in order to maintain our scheduled time frames and the quality of our work. Quadrant type inspections cannot continue as in the past, but we may be able modify this system to not overwhelm our office. The current license fee schedule for residential rental properties does not cover the cost of doing business nor is the fee schedule fair. Below is the current fee schedule, and based on current properties, what the total license fees should be for 2004. CURRENT LICENSE FEE SCHEDULE RESIDENTIAL RENTAL PROPERTY Rental License - 1 or 2 rental units Rental License - 3 or 4 rental units Rental License - 5 or more rental units Reinspection Fee No Show Fee License reinstatement after revocation or suspension. $22.50 per unit $75.00 per building $75.00 for the first 4 rental units, plus $10.00 per unit over 4. $100.00 for 1st and 2nd reinspections. $300.00 for 3rd and subsequent reinspections. $100.00 per no-show event. 10 times the annual license fee Current property totals as of October 2004: 1 242 242 $ 22.50 $ 5,445.00 2 217 434 $ 45.00 $ 9,765.00 3 14 42 $ 75.00 $ 1,050.00 4 38 152 $ 75.00 $ 2,850.00 5 ~, 20 $ 85.00 $ 340.00 6 8 48 $ 95.00 $ 760.00 7 15 105 $ 105.00 $ 1,575.00 8 ~ 48 $ 115.00 $ 690,00 11 29 319 $ 145.00 $ 4,205.00 12 !2 24 $ 155.00 $ 310.00 14 2 28 $ 175.00 $ 350.00 17 9 153 $ 205.00 $ 1,845.00 20 4 ~0 $ 235.00 $ 940.00 22 2 ¢4 $ 255.00 $ 510.00 34 1 34 $ 375.00 $ 375.00 35 2 !70 $ 385.00 $ 770.00 40 1 40 $ 435.00 $ 435.00 75 1 75 $ 785.00 $ 785.00 77 1 77 $ 805.00 $ 805.00 85 1 85 $ 885.00 $ 885.00 146 1 146 $ 1,495.00 $ 1,495.00 As can be seen we have a very diverse group of rental property buildings. The highest percentage is single and duplexes. These two types are also the most time consuming in regards to inspections, problems found, and the number of revocations. Most of our larger buildings have only elderly populations with on site caretakers or maintenance staffs. The fee schedule is unfair in regards to some of the smaller buildings. One or two units are $22.50 a unit. Three units would be $25.00 a unit. Four units would be $18.75 a unit with five units only costing $17.00 a unit. This is too much of a variation per unit. My proposal would be a straight fee per unit. Larger buildings would pay less per unit but all the units would be the same. As you can see by the chart above, our buildings naturally fall into three size ranges: 1 thru 10 units, 11 thru 30 units, and 31or more units. One last item on the current fee schedule would be the re-inspection fees. Later when we get into the proposed inspection schedule, there will not be 1st, 2nd, or 3rd re-inspections. This will eliminate all re-inspection fees. Fees were very hard to enforce and consumed a large amount of office staff time for billing and handling. We are proposing to continue the No Show Fee and the License Reinstatement Fee. No-shows at scheduled inspections continue to be a problem but not as often since we enacted the no-show fee. Revocations will be used for enforcement most of the time. To reinstate a revocated license will cost 10 times the annual license fees. This will cover the cost of the revocation process. This is in our current policy but hasn't been enforced due to the ordinance language was never changed to allow it. We are planning to change the ordinance language when we update the ordinance. LICENSE FEE PROPOSALS Attached are 6 license fee proposals. The proposals cover 55% to 90% of the costs of the program. No. of No. of TOtal# COst pet Cost per COst/unit TOtal units BUildings of units Unit BUilding /Month 1 242 242 $ 35.00 $ 35.00 $ 2.92 $ 8,470.00 2 217 434 $ 35.00 $ 70.00 $ 2.92 $15,190.00 3 14 42 $ 35.00 $ 105.00 $ 2.92 $ 1,470.00 4 38 152 $ 35.00 $ 140.00 $ 2.92 $ 5,320.00 5 4 20 $ 35.00 $ 175.00 $ 2.92 $ 700.00 6 8 48 $ 35.00 $ 210.00 $ 2.92 $ 1,680.00 7 15 105 $ 35.00 $ 245.00 $ 2.92 $ 3,675.00 8 6 48 $35.00 $ 280.00 $ 2.92 $ 1,680.00 11 29 319 $ 30.00 $ 330.00 $ 2.50 $ 9,570.00 12 2 24 $ 30.00 $ 360.00 $2.50 $ 720.00 14 2 28 $ 30.00 $ 420.00 $ 2.50 $ 840.00 17 9 153 $ 30.00 $ 510.00 $ 2.50 $ 4.590.00 20 4 80 $ 30.00 $ 600.00 $ 2.50 $ 2,400.00 22 ~ 44 $ 30.00 $ 660.00 $ 2.50 $ 1,320.00 34 1 34 $ 25.00 $ 850.00 $ 2.08 $ 850.00 35 2 70 $ 25.00 $ 875.00 $ 2.08 $ 1,750.00 40 1 40 $ 25.00 $1,000.00 $ 2.08 $ 1,000.00 75 1 75 $ 25.00 $1,875.00 $ 2.08 $ 1,875.00 77 1 77 $ 25.00 $1,925.00 $ 2.08 $ 1,925.00 85 1 95 $ 25.00 $2,125.00 $ 2.08 $ 2,125,00 146 1 146 $ 25.00 $3,650.00 $ 2.08 $ 3,650.00 600 226 $70,800 No. of No. of Total # COSt Per Cost per Cost/Unit TOtal units BUildings of units unit Building /Month 1 242 242 $ 45.00 $ 45.00 $ 3.75 $10,890.00 2 217 434 $ 45.OO $ 90.00i $ 3.75 $19,530.00 3 14 42 $ 45.00 $ 135.00 $ 3.75 $ 1,890.00 4 38 152 $ 45.00 $ 180.00 $ 3.75 $ 6,840.00 5 4 20 $ 45.00 $ 225.00 $ 3.75 $ 900.00 6 8 48 $ 45.00 $ 270.00 $ 3.75 $ 2,160.00 7 15 105 $ 45.00 $ 315.00 $ 3.75 $ 4,725.00 8 6 48 $ 45.00 $ 360.00 $ 3.75 $ 2,160.00 11 29 319 $ 40.00 $ 440.00 $ 3.33 $12,760.00 12 2 24 $ 40.00 $ 480.00 $ 3.33 $ 960.00 14 2 28 $ 40.00 $ 560.00 $ 3.33 $ 1,120.00 17 9 i153 $ 40.00 $ 680.00 $ 3.33 $ 6,120.00 20 4 80 $ 40.00 $ 800.00 $ 3.33 $ 3,200.00 22 2 44 $ 40.00 $ 880.00 $ 3.33 $ 1,760.00 34 1 34 $ 35.00 $1,190.00 $ 2.92 $ 1,190.00 35 2 70 $ 35.00i$1,225.00 $ 2.92 $ 2,450.00 40 1 40 $ 35.00$1,400.00 $ 2.92 $ 1,400.00 75 1 75 $ 35.00 $2,625.00 $ 2.92 $ 2,625.00 77 1 77 $ 35.00 $2,695.00 $ 2.92 $ 2,695.00 85 1 85 $ 35.00 $2,975.00 $ 2.92 $ 2,975.00 146 1 146 $ 35.00 $5,110.00 $ 2.92 $ 5,110.00 TOTAL 600 2266 $93,460;00 NO, of No. of Total # CoSt per CoSt Per COSt/unit Total UnitS BUildings of units unit BUilding /Month 1 242 242 $ 100.00 $ 100.00 $ 8.33 $24,200.00 _~ 217 434 $ 75.00 $ 150.00 $ 6.25 $32,550.00 3 14 42 $ 50.00 $ 150.00 $ 4.17 $ 2,100.00 4 38 152 $ 30.00 $ 120.00 $ 2.50 $ 4,560.00 5 4 20 $ 30.00 $ 150.00 $ 2.50 $ 600.00 6 8 48 $ 30.00 $ 180.00 5 2.50 $ 1,440.00 7 15 105 $ 30.00 $ 210.00 $ 2.50 $ 3,150.00 8 6 48 $ 30.00 $ 240.00 $ 2.50 $ 1.440_00 11 29 319 $ 25.00 $ 275.00 $ 2.08 $ 7,975.00 12 2 24 $ 25.00 $ 300.00 $ 2.08 $ 600.00 14 2 28 $ 25.00 $ 350.00 $ 2.08 $ 700.00 17 9 153 $ 25.00 $ 425.00 $ 2.08 $ 3,825.00 20 4 80 $ 25.00 $ 500.00 $ 2.08 $ 2,000.00 22 2 44 $ 25.00 $ 550.00 $ 2.08 $ 1.100.00 i 34 1 34 $ 20.00 $ 680.00 $ 1.67 $ 680.00 35 2 70 $ 20.00 $ 700.00 $ 1.67 $ 1,400.00 40 1 40 $ 20.00 $ 800.00 $ 1.67 $ 800.00 75 1 75 $ 20.00 $1.500.00 $ 1.67 $ 1,500.00 77 1 77 $ 20.00 $1,540.00 $ 1.67 $ 1,540.00 85 1 85 $ 20.00 $1,700.00 $ 1.67 $ 1,700.00 146 1 146 $ 20.00 $2,920.00 $ 1.67 $ 2,920.00 T 600 226 $96,780.00 No. of No. of TOtal # Cost Per CoSt per Cost/unit Total units BUildings °fUnits Unit BUilding /MOnth 1 242 242 $ 150.00 $ 150.00 $ 12.50 $36,300.00 2 217 434 $ 75.00 $ 150.00 $ 6.25 $32,550.00 3 14 42 $ 25.00 $ 75.00 $ 2.08 $ 1,050.00 4 38 152 : $ 25.00 $ 100.00 $ 2.08 $ 3,800.00 5 4 20 $ 25.00 $ 125.00 $ 2.08 $ 500.00 6 8 48 $ 25.00 $ 150.00 $ 2.08 $ 1,200.00 7 15 105 $ 25.00 $ 175.00 $ 2.08 $ 2,625.00 8 6 48 $ 25.00 $ 200.00 $ 2.08 $ 1,200.00 11 29 319 $ 20.00 $ 220.00 $ 1.67 $ 6,380.00 12 2 24 $ 20.00 $ 240.00 $ 1.67 $ 480.00 14 2 28 $ 20.00 $ 280.00 $ 1.67 $ 560.00 17 9 153 $ 20.00 $ 340.00 $ 1.67 $ 3,060.00 20 4 80 $ 20.00 $ 400.00 $ 1.67 $ 1,600.00 2 2 2 44 $ 20.00 $ 440.00 $ 1.67 $ 880.00 34 1 34 $ 15.00 $ 510.00 $ 1.25 $ 510.00 35 2 70 $ 15.00 $ 525.00 $ 1.25 $ 1,050.00 40 1 40 $ 15.00 $ 600.00 $ 1.25 $ 600.00 75 1 75 $ 15.00 $1,125.00 $ 125 $ 1,125.00 77 1 77 $ 15.00 $1,155.00 $ 1.25 $ 1,155.00 85 1 85 $ 15.00 $1,275.00 $ 1.25 $ 1,275.00 146 1 146 $ 15.00 $2,190.00 $ 1.25 $ 2,190.00 TOTAL 600 2266 :. $100,090.00 No. of No. of Total # Cost per COSt Per CoSt/unit Total units BUildings of units Unit Building /Month 1 242 242 $ 90.00 $ 90.00 $ 7.50 $21,780.00 2 217 434 $ 75.00 $ t50.00 $ 6.25 $32,550.00 3 14 42 $ 35.00 $ 105.00 $ 2.92 $ 1,470.00 4. 38 152 $ 35.00 $ 140.00 $ 2.92 $ 5,320.00 5 4 20 $ 35.00 $ 175.00 $ 2.92 $ 700.00 6 8 48 $ 35.00 $ 210.00 $ 2.92 $ 1,680.00 7 15 105 $ 35.00 $ 245.00 $ 2.92 $ 3,675.00 8 8 48 $ 35.00 $ 280.00 $ 2.92 $ 1,680.00 11 29 319 $ 30.00 $ 330.00 $ 2.50 $ 9,570.00 t2 2 24 $ 30.00 $ 360.00 $ 2.50 $ 720.00 14 2 28 $ 30.00 $ 420.00 $ 2.50 $ 840.00 17 9 153 $ 30.00 $ 510.00 $ 2.50 $ 4,590.00 20 4 80 $ 30.00 $ 600.00 $ 2.50 $ 2,400.00 22 2 44 $ 30.00 $ 660.00 $ 2.50 $ 1,320.00 34 1 34 $ 25.00 $ 850.00 $ 2.08 $ 850.00 35 2 70 $ 25.00 $ 875.00 $ 2.08 $ 1,750.00 40 1 40 $ 25.00 $1,000.00 $ 2.08 $ 1,000.00 75 I 75 $ 25.00 $1,875.00 $ 2.08 $ 1,875.00 77 1 77 $ 25.00 $1,925.00 $ 2.08 $ 1,925.00 85 1 _85 $ 25.00 $2,125.00 $ 2.08 $ 2,125.00 146 1 146 $ 25.00 $3,650.00 $ 2.08 $ 3,650.00 TOTAL 600 2266 $101,470.00 NO. of No. of total # Cost per CoSt Per COSt/unit TOtal units BUildings ~funits unit BUilding /MOnth 1 242 242 $ 55.00 $ 55.00 $ 4.58 $13,310.00 2 217 434 $ 55.00 $ 110.00 $ 4.58 $23,870.00 3 14 42 $ 55.00 $ 165.00 $ 4.58 $ 2,310.00 4 38 152 $ 55.00 $ 220.00 $ 4.58 $ 8,360.00 5 4 20 $ 55.00 $ 275.00 $ 4.58 $ 1,100.00 6 8 48 $ 55.00 $ 330.00 $ 4.58 $ 2,640.00 7 15 105 $ 55.00 $ 385.00 $ 4.58 $ 5,775.00 8 6 48 $ 55.00 $ 440.00 $ 4.58 $ 2,640.00 11 29 319 $ 50.00 $ 550.00 $ 4.17 $15,950.00 12 2 24 $ 50.00 $ 600.00 $ 4.17 $ 1,200.00 14 2 28 $ 50.00 $ 700.00 $ 4.17 $ 1,400.00 17 9 153 $ 50.00 $ 850.00 $ 4.17 $ 7,650.00 20 4 80 $ 50.00 $1,000.00 $ 4.17 $ 4,000.00 22 2 44 $ 50.00 $1,100.00 $ 4.17 $ 2,200.00 34 1 34 $ 45.00 $1,530.00 $ 3.75 $ 1,530.00 35 2 70 $ 45.00 $1,575.00 $ 3.75 $ 3,150.00 40 1 40 $ 45.00 $1,800.00 $ 3.75 $ 1,800.00 75 1 75 $ 4500 $3,375.00 $ 3.75 $ 3,375.00 77 1 77 $ 45.00 $3,465.00 $ 3.75 $ 3,465.00 85 1 85 $ 45.00 $3,825.00 $ 3.75 $ 3,825.00 146 1 146 $ 45.00 $6,570.00 $ 3.75 $ 6,570.00 TOTAL 600 2266 - : $116,120.00 1 242 242 $ 75.00 $ 75.00 $ 6.25 $18,150.00 $ ; 6000 $ 120!00 $ ;5!00; $26;04.0!00 ;; ; 3 14 42 $ 55.00 $ 165.00 $ 4.58 $ 2,310.00 152 ; $ 5500 I $ 220L00; $; 4;58 5 4 20 $ 55.00 $ 275.00 $ 4.58 $ 1,100.00 ;$;;5500 ;$;33000; 7 15 105 $ 55.00 $ 385.00 $ 4.58 $ 5,775.00 4.8 : ; $ ;55!00 $ 4.4000 $ ;;4.:58: ;;$ ;2;64.0!00;:; 11 29 319 $ 45.00 $ 495.00 $ 3.75 $14,355.00 12 2 24 $; ; 4.5!00 $ 54.0:00 $ :3:~5: 14 2 28 $ 45.00 $ 630.00 $ 3.75 $ 1,260.00 9; ; 153 : ; $ 4500 ;$ 56500 $ :3i~5 $ 6;885~00 ; : 20 4 80 $ 45.00 $ 900.00 $ 3.75 $ 3,600.00 22 ;;: $ $; ;;990:00: 34 1 34 $ 40.00 $1,360.00 $ 3.33 $ 1,360.00 40 1 40 $ 40.00 $1,600.00 $ 3.33 $ 1,600.00 $3;000:00 $ ;3;000:00 77 1 77 $ 40.00 $3,080.00 $ 3.33 $ 3,080.00 85 1 85 $ 40:00 :$314.00:00 $ 3!33 $ 31400!00 146 !1 146 $ 40.00 $5,840.00 $ 3.33 $ 5,840.00 PROPERTY MAINTENANCE CODE LICENSING PROCEDURE One of the bigger changes will be in our licensing procedure. The chart on the next page shows our current system and our proposed system. The current system allows over 60 days to complete applications, submit fees, and schedule inspections. This is way to long. Our proposal gives the owner/tenant more time before their re-licensing date to meet their requirements. Only one reminder letter will go out prior to their re-licensing date. We will require that the initial, scheduled, interior inspections must be made prior to the re-licensing date. We have had problems in the past with owners waiting until the last day to come in and submit paperwork and then schedule their inspection 2-3 weeks out when the building is past its re-licensing date. Commercial inspections and exterior inspections are given to the inspectors the first of each month so the initial inspections are completed prior to the re-licensing date. We are also eliminating the late fee follow-up letters. Again, it is time consuming for the office to chase late fees. We will go straight to revocation at the first of each month if any one or all requirements are not met. On the next page is a chart to compare our current and proposed licensing procedures. (R:ESIDEN!IAL) (R~SIDENTIAE) 30 days prior to 45 days prior to 45 days prior to 45 days prior to license date, license date, license license date, license license date, license and application and application and license application inspection request inspection request inspection request and inspection sent out. are mailed out. are mailed out. request are mailed out. After 15 days, if After 30 days, if After 15 days if no After 15 days if no inspection not license application & inspection inspection scheduled, 2® fees are not in & appointment is appointment is notice sent out. initial inspection is requested the requested the not completed a address is given to address is given to reminder letter is inspectors, inspectors. sent. After 30 days, final After 45 days, license After 30 days, if After 30 days, if notice sent to application & fees license application license application schedule must be in and initial and fees are not in, and fees are not in, inspection and 2® inspection must a reminder letter is a reminder letter is notice for late completed. If one or sent. sent. license and fees all are not done the +25%. property is scheduled for a revocation hearing. After 45 days, late After 45 days, if the After 45 days, if the license final notice license application license application sent + 50%. and fees are not in and fees are not in the property is and an inspection scheduled for a could not be made, revocation hearing the property is scheduled for a revocation hearing After 60 days, final notice for inspection sent out. Revocation process. The other major change will be our actual inspection process. This process is where most of the time is taken due to the many different time frames and 2® and 3rd inspections offered. Below I have printed our current system and our proposed system. Our plan is to eliminate the extra inspections. We feel that 30 days is enough time to make most repairs and there are extension provisions for those larger jobs. CURRENT INSPECTION PROCESS TYPE OF VIOLATION Time to 1st Time to 2nd Time to Re- Re- Final Re- Inspection Inspection Inspection Heating Problems 24 hours Citation Missing or Inoperable Smoke 24 hours Citation* Detector Standard Violations** 30 days 15 days 10 days Priority Violations (Significant life 10 days Citation safety violations) Outside Storage Violations*** 30 days Citation Notes: *Citation for missing or inoperable smoke detectors shall be given to tenant if owner has provided proper evidence to our office that smoke detector was provided by property owner and was present and operational prior to our inspection. **Extensions may be granted by the Rental Licensing office upon request of property owner. ***Outside storage refers to '5A.207(1 )(f). PROPOSED INSPECTION PROCESS TYPE OF VIOLATION TIME TO FIRST DISPOSITION REINSPECTION Priority Violations Citation, (Significant life safety 10 days Abatement or violations) License Revocation* Citation, All Other Violations 30 days Abatement or License Revocation* *License revocation does not apply to non-licensed properties, i.e. owner occupied single-family homes. There still will be provisions for extensions. It is still our goal to have the work done in a timely manner. The problem we have had in the past is that property owners were asking for extensions after their 3rd inspection or just before a revocation hearing. This would buy them time after they did no work for the last 60 days or more. This has dragged out the process. Extensions will only be granted if requested during their initial 30-day compliance time. The council could still grant an extension during a revocation or abatement hearing. The new policy will give us an option for which way we want to pursue compliance. The original violation letter will warn of the possibility of license revocation, abatement, or a county citation. This will meet the notice requirements for revocation or abatement. If violations are not completed the next letter sent will notify the owner of which method we are going to use and will also include the hearing date for either revocation or abatement. The tenant will also be notified at this point of any hearings. Without a 2nd re-inspection and a final inspection, and the office time to generate them, this will cut approximately 30 days off of the process. If we decide to use the revocation process, we have shortened this process up by approximately 15 days. In the past we would notify the tenants and owner during the final inspection of the possible hearing date, which would be at least a month away. We would go to the next council meeting to set a hearing date for the following council meeting 2 weeks away. Our proposal would allow us to set the hearing date with the Council Secretary. On the next page is our current and proposed revocation process. REVOCATION PROCESS CURRENT PROCESS 2nd (final) re-inspection notice, owner and tenant are notified of revocation hearing date. Notice sent to tenant certified mail. Add Set Hearing Date resolution to City Council agenda. At next Council meeting, set hearing date for revocation. (2 weeks out). After 3rd re-inspection, if violations are not corrected, owner is sent Statement of Cause for revocation hearing and final inspection date. Pre-revocation (final)inspection Revocation Hearing in front of City Council If license is revoked, post building with Notice to Vacate posting and Council order. Notify owner and tenants by certified mail. Posting gives 60 days to vacate. After 60 days an Unlawful to Occupy posting is put up. The City may ticket occupants and/or owners, or go through Anoka County Court to have occupants removed PRoPOSED PROCESS After 10/30-day re-inspection, owner and tenant will be notified, by regular and certified mail, of the revocation hearing date. The owner's notification will include the Statement of Cause. Set hearing date with Council Secretary. Pre-revocation (final)inspection. Revocation Hearing in front of City Council. If license is revoked, post building with Notice to Vacate posting and Council order. Notify owner and tenants by certified mail. Posting gives 60 days to vacate. After 60 days an Unlawful to Occupy posting is put up. The City may ticket occupants and/or owners, or go through Anoka County Court to have occupants removed One note regarding this new policy is that we have not written in any provisions, other then what we do now, for long grass and weed inspections. At this time Public Works is in charge of this program but it would be very easy to include it into this policy. It would be very efficient to include the long grass inspections under this policy and our department but we would have to look into the program further to see if we have adequate staffing levels. With this letter is a copy of our proposed policy for our inspection program. I have given some explanations here for the changes made, but I should sit down with you and go over the whole process before we meet with the council. I believe that the new process will meet our goals: - significantly speed up the process - allow some flexibility for staff - more cost effective program - more user friendly for the citizens (one department doing all inspections) licensed property fees will cover their costs significantly reduce the number .of re-inspections and follow-up paper work. Our next step in this process will be to make changes to City Ordinance #1395 so it will fit with this policy. The ordinance changes for residential properties should not be drastic but there are areas that are very gray and hard to enforce. There are also other areas that are outdated. The only big change is to add non- residential properties to our licensing and inspection process. Our goal is to have the ordinance changes by early spring. The first licenses for 2005, under the proposed policy, would be sent out on January 15, 2005. CI'TY OF COLUMBI'A HEI'GHTS Fl'RE DEPARTMENT PROPERTY MAINTENANCE INSPECTION POLICY EFFECTIVE JANUARY 1, 2005 PURPOSE This policy is intended to guide the administration of all property maintenance, licensing and inspections. POLICY It shall be the policy of the City of Columbia Heights to conduct property maintenance licensing and inspections according to the procedures outlined in this document, City Ordinances, State Fire Code and the State Building Code. The Fire Department will administer this policy under the name of the Property Maintenance Inspection Office. This policy will cover the maintenance of all property, public and private, that is not under the control of an active Building Permit. This includes maintenance of all property improvements, structures, vegetation, parking/driving areas, infrastructure, outside storage, and vehicles (Police to handle junk vehicle ordinance) PROCEDURE Inspection Hours. Hours for conducting non-scheduled inspections shall be Monday through Friday, 8:00 am - 4:45 pm. Inspections may be performed outside this time frame if needed. Scheduled inspections shall be Monday through Thursday, 9:00 am- 11:00 am and 1:30 pm-4:00 pm. Property Identification. All properties will be assigned an occupancy identification number. The specific occupancy type of the property/space will determine the occupancy ID number. See the chart below for numbering system. OCCUPANCY ID TYPE OF OCCUPANCY NUMBER RANGE 10000 - 10999 Single Family Rental 12000 - 12999 Owner Occupied Two Family Dwelling 20000 - 29999 Two Family Rental 30000 - 34999 Multi Family (3 or more units) Rental 35000 - 35999 Owner Occupied Condominiums 40000 - 49999 Commercial Property 50000 - 59999 Industrial Property 60000 - 69999 Churches and School Property 70000 - 79999 City Owned Property 80000 - 89999 Vacant Property 90000 - 99999 Owner Occupied Single Family Homes LICENSING All property, except Owner Occupied Single Family Homes, shall be licensed. Licenses are not transferable. Non-residential properties with multiple tenant spaces shall have a license for each individual tenant space. New property owners or non-residential tenants must submit a new application within 30 days. Any change in occupancy classification shall be approved prior to occupation of the space or property. Licensing procedure is as follows: Residential Rental Property. Every property will be given a licensing date. The date is always the 1st day of a month. The license will run for one year from that date thru the last day of the 12th month. License applications will be sent out to the owner 45 days prior to their licensing date. The application will require that a signed, updated application be returned along with required fees prior to the re-licensing date. A reminder letter will be sent out 15 days prior to the re-licensing date reminding the owner to return their application and fees. On the first of the month, the re-licensing date, all properties that have not submitted their application and fees will be placed on the agenda of a City Council meeting for revocation of license. Non-Residential Properties. Every property will be given a licensing date. The date is always the 1st day of a month. The license will run for one year from that date thru the last day of the 12th month. License applications will be sent out to the owner/tenant 45 days prior to their licensing date. The application will require that a signed, updated application be returned along with required fees prior to the re-licensing date. A reminder letter will be sent out 15 days prior to the re-licensing date reminding the owner to return their application and fees. On the first of the month, the re-licensing date, all properties that have not submitted their application and fees will be placed on the agenda of a City Council meeting for revocation of license. PROPERTY MAINTENANCE CODE LICENSING PROCEDURE TABLE FORM RESIDENTIAL WITH RESIDENTIAL NON,RESIDENTIAL INTERIOR WITHOUT INSPECTION INTERIOR INSPECTION 45 days prior to 45 days prior to 45 days prior to license date, license license date, license license date, license application and application and application and inspection request inspection request inspection request are mailed out. are mailed out. are mailed out. After 30 days, if After 15 days if no After 15 days if no license application, inspection inspection fees, and initial appointment is appointment is inspection are not in, requested the requested the a reminder letter is address is given to address is given to sent. inspectors, inspectors. After 45 days, all 3 After 30 days, if After 30 days, if items: license license application license application application, fees, and and fees are not in, a and fees are not in, a initial inspection must reminder letter is reminder letter is be in and completed, sent. sent. If one or all are not done the property is scheduled for a revocation hearing. After 45 days, if the After 45 days, if the license application license application and fees are not in and fees are not in the property is and an inspection scheduled for a could not be made, revocation hearing, the property is scheduled for a revocation hearing. LICENSE FEES All licensed properties will be assessed a license fee. The fee will cover the length of time of the license only. As with the license, the license fee is not transferable. The license fee may be prorated for a specific length of time for the remainder of a licensing year. Proposed Licensing fees are as follows: RESIDENTIAL ITEM 2005 Rental License- 1 TBD thru 10 rental units Rental License- 11 TBD thru 30 rental units Rental LiCense - 31 TBD or more rental units No Show Fee $100.00 per no-show event License reinstatement 10 times the annual after revocation or license fee suspension NON-RESIDENTIAL At this time we are proposing that during the first year, 2005, we will charge a flat fee of $20.00 per property/tenant space. The applications will ask for the square footage of each property or tenant space. Starting in 2006, we will charge a licensing fee based on the size of the space. The rationale is that we have commercial office space that has tenants renting a few hundred square feet and large spaces of 10,000 square feet and more. They should not have to pay the same amount. Currently the Fire Department has 521 known occupancies/tenants considered non-residential. This does include all commercial, industrial, government, churches, and school occupancies. INSPECTIONS All licensed properties are required to have periodic inspections as per this chart: OcCUpancy ID Interior Required Exterior Required Number 10000 - 35999 Every other year Every year 40000 - 89999 Every year Every year 90000 - 99999 None By complaint* *The Fire department has the right to make systematic inspections of properties as individuals, blocks, or areas of the City. 45 days prior to their re-licensing date, along with the license application, the owner/commercial tenant will be requested to schedule an inspection if required. Residential rental properties that require inspections of the individual tenant units are required to schedule an inspection with the Fire Department. Tenants shall be notified, by the owner, of the inspection at least 24 hours prior to the scheduled inspection. The Fire Department will not inspect individual units that have not met the minimum 24 hours notice. It is the right of the tenant to refuse to let us conduct an inspection of their individual tenant space. The Fire Department may acquire an administrative search warrant to conduct the inspection. The Fire Department reserves the right to inspect a randomly picked sampling of units based on the size of the building and past inspection history. The occupancy identification number will be used to determine the year in which residential rental properties receive inspections of the individual rental units. Properties, which have an even occupancy ID number, will have unit inspections during even numbered years. Properties, which have an odd occupancy ID number, will have unit inspections during odd numbered years. Rental property owners desiring to change the year of inspection for a property may do so one time by contacting the fire department Inspection office. All licensed residential properties are required to have an inspection of the exterior and common areas every year. Non-residential properties/tenant spaces are required to have interior and exterior inspections every year. This will include the annual fire inspection as mandated by the State Fire Code. Residential rental properties that do not require inspections of the individual units, and all other properties, will have the opportunity to schedule an inspection until 30 days prior to their re-licensing date. After this date the inspections will be made during regular inspection hours without prior notice. Properties/tenants that are not open during regular business hours are required to set up an appointment for their inspection. The initial inspection must be made prior to the property's re-licensing date for all properties. On the first of the month, the re-licensing date, all properties that have not had their initial inspection will be placed on the agenda of the next City Council meeting for revocation of license COMPLAINT INSPECTION. The Fire Department shall respond to all complaints. Complaints will be accepted either verbally or in writing. A written record of the complaint will be made. Complainants are encouraged to identify themselves however it is not required. Information regarding the identity of any complainant is private data and will not be released to public. Complaints will be included as a scheduled inspection unless it is determined that it is a Priority Inspection. Priority Inspections will be responded to as soon as feasible. Complaints of individual residential rental units will follow the above policy with some differences. Complaints must originate from a tenant of the unit. Except for Priority Violations, complaint inspections will not be made for tenants that are under an unlawful detainer or part of an eviction process. If a complaint is in regards to the exterior of a property the inspectors may, based on the type of violations and the condition of neighboring properties, inspect those neighboring properties that have similar violations or are of similar condition. Violation Correction When violations are found by inspectors, the owner of residential properties or the owner/tenant of non-residential properties shall be given reasonable time to correct the violations. Following is the schedule to be used by the Property Maintenance office: TYPE OF VIOLATION TIME TO FIRST DISPOSITION REINSPECTION Priority Violations Citation, (Significant life safety 10 days Abatement or violations) License Revocation* Citation, All Other Violations 30 days Abatement or License Revocation* *License revocation does not apply to non-licensed properties, i.e. owner occupied single-family homes. The property owner or commercial tenant will be mailed a violation notice. The notice will contain the date of the inspection, any violations found, and the date/time of the re- inspection. The notice will also contain the process/penalties if the violations are not corrected by the re-inspection date. If violations are not corrected, the property may be put on the agenda of a City Council meeting for a possible license revocation hearing or abatement hearing. EXTENSION PROCEDURE Extensions to the violation correction schedule above may be granted by the inspection staff, office staff or the Property Maintenance Enforcement Officer subject to the following guidelines. Extensions will only be granted if requested during the initial 30-day time to the first reinspection. Requests for extensions received for non-priority violations can be granted routinely by inspection staff or office staff for up to a maximum of 14 days. Any length of time longer than this requires the approval of the Property Maintenance Enforcement Officer. Seasonal extensions for exterior work, which cannot be completed due to cold weather, may be granted to no later than June 1 of the following year. Examples include exterior painting, siding replacement, roofing, concrete, or asphalt work, retaining walls, landscaping or other work with soil that is frozen. Special extensions may be granted for large projects that require more time or are a financial hardship. Requests for these extensions are to be in writing with an explanation as to the hardship. The request must include a completion date. Only one special extension will be granted for a violation. Extensions involving heating violations require the approval of the Property Maintenance Officer. Generally, the property owner will be granted reasonable extensions provided that significant efforts are being made by the property owner to comply and circumstances beyond the control of the property owner exist. A re-inspection of extension items will be made to verify compliance. If the violation is not completed the property may be given a citation or the property will be put on the agenda of a City Council meeting for a license revocation hearing or abatement hearing. SPECIAL SITUATIONS There may be times that deadlines cannot be made due to special situations beyond the control of the City and its staff. An example may be a missed inspection due to an emergency call. The inspection office has the right to deviate from this policy as long as the intent of the policy is met. REVOCATION PROCESS When the property has not met the above requirements, licensed properties may have their license revoked. The license can only be revoked by the City Council as part of a revocation hearing. Property owners and tenants are to be notified of the revocation hearing by regular and certified mail. The owner's notification will also include the Statement of Cause. The revocation hearing will be set by staff with the City Council Secretary. Staff will schedule the hearing to give the owner and tenants at least 14 days notice. A final pre-revocation inspection will be performed, if needed, prior to the hearing. If violations are corrected and all other requirements are met, the hearing will be closed. At the revocation hearing, the owner and all tenants will be given an opportunity to be heard by the City Council. The City Council has the right to revoke or suspend the license, grant an extension, table the motion, or refuse revocation. If the license is revoked, the owner and tenants will be notified be regular and certified mail of the revocation. The property will also be posted. The posting gives 60 days to vacate. Sixty days after the original posting of the property, an Unlawful to Occupy posting will be put on the building. The Fire Department may write the owner and/or occupants a County Citation or begin the process with Anoka County Courts to have the occupants removed. To re-license a revoked property, all requirements of this policy and the Property Maintenance Code ordinance shall be met. This includes all outstanding fees. ABATEMENT PROCEDURE City ordinance #1461 allows for the abatement of Property Maintenance violations that the City Council deems a nuisance affecting public safety. The Property Maintenance Office will follow the procedures outlined in the ordinance. The violation letter sent to property owners/tenants will advise that abatement may be one of the options used if the violations are not completed by the re-inspection date. If the violations are not completed by the re-inspection date, and the Property Maintenance Office decides to use this option, the property owner/tenant will be scheduled for an abatement hearing at a City Council Meeting. COUNTY CITATION The Fire Chief and Assistant Fire Chief are allowed, by City ordinance, to write County Citations. The Property Maintenance Office will follow the procedures outlined in the ordinance. The violation letter sent to property owners/tenants will advise that a County Citation may be one of the options used if the violations are not completed by the re-inspection date. If the violations are not completed by the re-inspection date, and the Property Maintenance Office decides to use this option, the property owner/tenant will be given a County Citation. CITY COUNCIL LETTER Meeting of: AGENDA SECTION: ORIGINATING DEPARTMENT: CITY MANAGER APPROVAL NO: Fire ITEM: 800 MHZ Equipment Purchase BY: Charles Thompson BY:~2/~~~'~ DATE: January 12, 2005 DATE: ~'~ NO: BACKGROUND: In the fall of 2004, Anoka County Central Communications began to migrate to the 800 MHZ systems. This migration involved all Anoka County Police and Fire agencies. The fzre departments were given hand held radios, base stations, and mobile radios based on the population of the city. Unfortm~ately, this disbursement of radios was a significant shortfall from what was standard for the Columbia Heights Fire Department. The Columbia Heights Fire Department operated with 30 hand held radios, one base station and 8 mobile radios. With the base station, we had three remote heads so that the system itself could be utilized in the Fire Chief's office, the Assistant Fire Chief's office, and in the Police and Fire Training room which is also is the City's EOC (Emergency Operations Center). ANALYSIS: Anticipating a major shortfall in radio equipment, the Fire chief proposed the purchase of 800 MHz equipment in the 2005 Capitol Equipment purchase plan as presented to the Council in the 2004 budget process. This plan included the purchase of 15 hand held radios, 15 spare batteries, three remote heads to be located in the designated areas, as well as various loose equipment such as spare batteries, speaker microphones, cable for the installation of the remote heads, and 110 volt chargers. All quotes were given by ANCOM Communications, Inc. This company currently holds the State Bid Contract for our area (State Bid Contract Number: 433614). RECOMMENDED MOTION: Move to Award the 800 MHZ Equipment Purchase to Ancom Communications, Inc., Based upon their Low, Qualified, Responsible Bid in the Amount of $39,599.45, plus any Additional Taxes with Funds to be Appropriated from 431-42200-5180; and Furthermore, to Authorize the Mayor and City Manager to Enter into an Agreement for the Same. 05-4 COUNCIL ACTION: