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HomeMy WebLinkAboutEDA AGN 04-27-10AGENDA COLUMBIA HEIGHTS ECONOMIC DEVE~OPMENT AUTHORITY TUESDAY, April 27, 2010 7:00 p.m., City Hail, Conference Room 1 1. Call to Order/Roll Call Gary L. Peterson, President Bobby Wiiliams Marlaine Szurek, Vice President Bruce Nawrocki Bruce Kelzenberg, Se~ret~rylTrea~tar~r Gerry He~ ringer Tammera Diehm 2. Pledge of Allegiance CONSENT AGENDA 3. Approve Minutes of March 23, 2010 Approve financial report and payment of bills for March 2010 Motions: 1~11~ve to V~aive the Reading of Rero!ution 2Q10-06, there being ~n ~mple amount of copie~ available to the public. Move to Approve the Minutes and Resolution 2010-06 approving the financial report and payment of biils for the manths of Nlarch 2010 BUSIRIESS lTEMS 4. Community Gardens - 4147 7`h Street Grace Lee MOTEC}N: Move ta appro~e 4147 7th Street as a comrrgunity garden and d~signating Grace L~e a~ th~ ~arr~m~nitv ~~r~Pn m~n~ger 5. 37t~ and ~~ntral - New prQp~s~l disc~!ss6on 6. Mady's appraisal MOTIC~N: Move to authorize stafF fo proceed with negotiatians far purchase of property ls~cated at 3919 Central Ave. awned and aperated by Mady/Fass Partnership (including any EDA parameters or conditions) 7. First Look users MOTION: Move to approve Everwood Company, Robert Engstrom, MyHomeSource, and Sarah Huss to be part of the Columbia Heights "First Look" prograrn 8. Administrative Report 9. Other Business Next regular meeting is scheduled for May 25th af City Hall in Conference Room 1 ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE REGULAR MEETING March 23, 2010 The meeting was called to order at 7:00 pm by President-Gary Peterson. Meinbers Presenfi Bruce Nawrocki, Marlaine Szurek, Tammera Diehm, Uary Peterson, Gerry Herringer, Bobby Williams, and Bruce Kelzenberg. S~ai~ I~resent: Wait rei~sr, Scort i iarK, ~heiia ~a~rtney, and Sheiiey %ianson. Also present were: Jack Boarman and John Gould froln BKV, Sam Newberg from Joe Urban Inc. who dicl the nlarlcet study, and resideilts Grace Lee and Mary Tholkes. 2. PLEDGE OF ALLEGIANCE- RECITED 3. CONSENT AGENDA Nawrocki referenced a letter sent to residents to natify thei~~ af this meetin~ regarding the presentation of fhe Ivlarket Study for the Grand Centr~l Froposed Froject. He tc~olc c~lfense to the wording of fhe letter. ,It is his opinion that because it is a Public Meeting, anyone should be allowed to speak on an issue. He daesn't dif'ferc~ntiate between a Publie Meeting at~d a Public Hearing. 2. ~t~~t~rcvE t~~ P~Iinut~s ~f F~bruarY~ 2~, 2010. Nawrocki asked if staff had checked whether GMHC had proper Insurance as referenced in the minti~es trom the Febluary 23r`~ meeting. ~'lark said they h~d checked, and GMHC has the proper Insurance. Nawrocki then asked if the Phase 1 environmentai assessment was done on the Root property. Llark res~onc~ed that t~hase 1 was dc~ne in November but ~he ~ity has nat received a copy oi the repc~rt as of this tiine. He said the issue he addressed with a representative of the owner was that tlley have not provided adequate doctimentatiorl for reimbufsen~ent frc~m the DEED Cirant. Nawrocki asked if the site has col~tarnina~ian. Clark again stated he has not seen the repc~rt so he doesn't know if the site is contarninated, anc~ therefore, st~ff has not hanored a reql~est ff~r reimbursement for the assessment. Motion by Dieh,m, seconded by Szurek to czpprove the ininutes frvnz the meeting of ~~hN~;c~; y 2~, 2~J?~, Al? ~y~s. MnTr~?nI pA_.rrFJ. 2. ~pprove the Financial Re~ort and Pavment of Bills for Februar 2~per Resolution 2010-OS Questions from members: Nawrocki questioned expenses fi~om the rebruary Iist of payments made as follows: Page 4-He qiiestioned payment to Ehlers. Clark told 11im it was the ~ee for tlze Financial Seminar. There was a discussion regarding the list of bills paid and the financial stateinents that were enclosed in the agenda packets. It was noted that the first part of the report is the checks isstied and the second part is the financial statements that indicate what fund the payments were applied to and how it relates to the budget overall. EDA MINUTES PAGE 2 March 23, 2010 _Motion by Szurek, seconded by Di~h~n, to waive the Reading of Resolution 2010-05, there being ai~~ple copzes available tv the public. All ay~s. MOTION PASSED. Motion by Wzlliczms, seconded bv Diehm, to adopt Resolution 2010-05, a~~proving the r . ia w i~m~~~a r n i nnr~r~ t%inancic~i lce~ori anu pcrymeni oj~bziis for rer~ruary 2v1 u. ~~~ ayes. Ivlvllvlv rh~~GL. EDA RESOLUTION 2010-OS RESOLLiTION OF THE COLLiMBIA HEIGHTS ECONOMTC DEVF.LOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR FEBRUARY 2010 AND PAYMENT OF BILLS FOR THE MONTH OF FEBRUARY 2010. WHEREAS, the Columbia Heigl~ts Economic Development Authority (EDA) is requirec~ by Minnesota Statutes Section 469.096, Subd. 9, tc~ prepare a detailed financial staten~ent wt~ich s~lows all reeeipts and disburseme~lts, their nature, t11e n~oney on hand, the purposes to wl~ich the mot~ey an hand is to be applied, the ~D~'s ceedits a~~d ~ssets a-~d its e~utstat~ding liabilities; a-~d WgIEREA~, said Statl~te also reqtair-es t}~e E13~ ta exar~~ine tt~e statement and treastiirer's vauci7ers c~r bills and if correct, tc~ approve them by resolution and enter the resolution in its t-ecorcis, ancl WIIEIZEAS, the fi~~ancial s~atement for the montl~ of February 2010 and the list of biils for the month of February 2010 are attachecl 1lereto and made a part of this resol~~tioi~; ~nc! WHEREAS, t11e EDA has examined tlie tinancial state~r~ent and the list of bills and finds them to be acceptable as to botl~ form aild accuracy. NO~V, ~I'I~FREF'C)RE ~F I'i' I2ESOLVED by the ~oard of Con~r~~issio»ers af the Coltiimbia Heights Econamic Develc~pment Authority that it 11as examined the a~ttached tinanci~l statei~ients and list of bilIs, which ~re attached heret~ and ~nade a part hereof, and they are fouild to be correct, as to fornz and ec~ntellt; and BE IT FURTHER RESOLVED the fi-~aucial statements are ackilowied~ed and received and the list of bills as presel~ted in writing are approved fc~r paytneitt at~it of prop~r furlds; and SE IT FURTHER RESOLVED this resolution and attae(~mei~ts are to be lnade a part of the perma~~ent records of the Colitmbia Heights Economic Development Authority. Passed tl~is 23rd day of M~rch, 2010. MOTION BY: Wiliiams SECONDED BY: Die1~m AYES: All ayes Presidellt Attest by: Shelley Hanson, Recording Secretary EDA MINUTES YAGE 3 MARCH 23, 2010 4. BUSINESS ITEMS Community Gardens- Cartney explained that two individuals are iilterested in starting a community garden and have AYlllt'(1`~l(;~iP,(j t~1[ C~11V Ttl I1(lrl1 ['~1CE'C f~'1P,V ~IAVP. 7'P,(111P,4tP,CI t~1P, 11~'iP, (lf i3 ~~1tVI~'T~A C1W1lP,(~ ilflTC,P,I. C~11P. (lf -rc --~- -- ---- ----- --~ ---- - -- t ~ r------ ---- -- the individua~s is Grace Lee who lives o~1 the 4200 block of Washington ~~reet. She is interested in starting a SOlC3 non-profit and would do community gardens as part of this IZOn-profit. The other is Mary Tholkes wha lives on the 3900 bloclc of Reservoir Blvd. and works for Wells Fargo. Mary is inter•ested ii1 coinmunity garderls as part of the We11s Fargo conunul7ity outreach program. Ideally staff would like both parties to wc~rk together on this effort and use one lot, especially since this is the first attempt at a"private comrnunity garden." Based on the collective discussions with both parties, the objectives of the community garden would be to teach people about ~ardening, provide fresh prc~duce to SACA, and providing yauth with garden experience opportunities. If the EDA would a11ow temporary use of a parcel, staff suggests using the city owned lot at the SE corner of 40th Avenue and Jackson Street (828 40t~' Ave). The lot is vacant and has a 1lydrant located on the 1ot. The hydrant can be used as a watering mechanism far the gardens, as is the case for the Reservoir Blvd. City ownecl coinlntu~ity garden. Clark stated none of the other lots have hydrants Ic~cated in a place where they could be used without having ta go aeross a street or sidewalk. Mary h~s requeste~ that in addition to allowing us~ o~'the Iots that city prepare the site with tilling, adding black dirt and mulch. In discussions with Public Works it is our estimate that this will cost $1,000 in materials and staff` time. In addition to site preparation, a meter with a back flow preventer must be installed on the fi~~e hydrant with a cast estimated at $1,000. Tc~tal site preparation is estiinated at $2,000. Marv is requesting t~he F.,DA help cover these costs. Her plan is to partner with SACA and have those elients tnat are in~erested in a garden plot tc~ help work the site. Graee Lee wants to in±rc~duce youth groz~ps or neigh~ors that are intereste~ in Iearning al~~i~t gardening and wc~rking the site to be invc~Ived wi~~h her praject. Foua- s~narate r~c~uests ar~e befca~e the EI~A: (1) Allow the use of c~mmunity garden on a City/EDA owned lot; staff su~gest~s the vacant lot at 828 40t~' Ave. (2) To help pay for site preparation in an estimated amount of $1,000 (3) To help pay for the hydrant equiplnent at an estimate of $1,000 (4) Cost of water used at the site for the gardens. Staff recoinmends the EDA approve the use of a commtulity garden at 828 40`~' Avenue, and that the Lisers enter into an agreeinent with the EDA regarding the use. The EDA sllould discuss whether they want to have any financial investment, other than the lot, for this project. If the EDA does agree to provide some financial assistance for this project, a motion wi11 be necessary. Questions from Members: Peterson said when he received the letter he thought it was a good idea and that staff is recommending a good site to work with. I-Iowever, he thinks the City's only responsibility should be to provide the lot and water. Tl1e tilling and seeding should be done by the volunteers themselves. EDA MINUTES PAGE 4 TvIARCH 23, 2010 Nawrocki agreed with Petersoll. He asked if anyone had checked to see if there is any room left at the Commi2nity C~ar~ens sit~ on Res~rvoir Blvcl. C'lark st~ted the Citv is in ch~rge c~f the gardens at tlaat sate and that the individual plots are rented out for a small fee to cover the water and tilling expenses. He went oiz to explain there are only 2-3 small pIots on that si~e that may be available. Diehin was looking at this issue as a community project that would provide a place for neighbors to gather and work together for a common ~oal. She Icnows others are interested in this as well as Grace and Mary. She also understands staff's concerns and recommends a policy be established regarding use of the City owned lots. One idea would be to use grant nloney received by the non-protit organization or fi-om donatioi~s, for the expense of the water. Cla~•k stated water is t11e Ynajor issue with usi~lg the City lots. The water and sewer have been cut at the street and capped, tlzerefor~ there is no casy way to prc~vide v~~ater to the gardens. ~'hat is why they hact ch~sen the site at ~2H 4~t~' Avenue. Herringer agreed a palicy shol~ld be est~i~lished. FIe stated it must be understaod that i1~ the c~pport~.~nity should arise tc~ sell the lot fo~r re-deveic~prr~ent, t1~at wu~~1d take pr~cedence ~,v~r th~ use i~i g~rder~ sp~cE. Peterson asked if the lots would need to be tilled and have mulch added to make them workable. Tholkes said they wc~uld. Peterson said he would be willing to lise the City's equipment to till the lots if he could get other volunteers to help with the process. He believes they shauld pay for the water usage. koseanne Rivers, 4224 .letferson ~t, ~vould like t6 exparld her gardelz space, and share with other I~eighbors who ~re also interested in having a garden space. She wants to use the lot at 4235 ~Vashington St. She sliggeste~.~ putting~ a rain barrel 0~1 the sit~ tc~ prc~vide water to t~he ~arden spaces. Grace Lee said she has gone to meetings of the non-profit group "Uardening 1Vlatters", an organization that helps people start these types of zleighb~~•hoad projects. She stated they reconlmend havinb at ~least 10 committed people for each lot to make them siiccessiul. Mary Tholkes stated she has over 30 interested parties from SAC~, so she fi~zres out of t~hat group, she Caii ~ci ai i2~tSi i.~i ~viiiiiiiiii;u YCv~iC. Fehst thought we should allow the use of the lots, provide the tillin~ and mulch and provide water to them. Nawrocki stated the City bought the lot at 828 40`~' Ave for possible use by the Library for additional parking. He suggested sending this matter to the Library Board for their approval to use the lot in this mai~~er. Nawrocki again suggested using space on the Reservoir Blvd site to accommodate their needs. Both Tholkes and Lee said the 2 or 3 rernaining plots are not big enough for what they want to do. EDA MINUTES PAGE 5 MARCH 23, 2010 Diel~m c~uestioi~ed if there w~uld be any ~~natching funds fi°om non-pro~ts for retro-fitting the hydrant and providing water to the site. Lee said they wouidn't quali~y for iundinb at tizis tinle since they havel~'t estabaiished themselves as a 501 G3 yet~. The discussic~n turned to use of rain barrels. Tholkes said it is possible to use them, but wondered whether they would attract kids and vandalism. Diehm then asked if we could handle these as an Interim Use Pernlit and have the r-equests go througli the Planning Commission. C1ark said we could, but the struggle this year is the timeframe. They want to start planting by the end of April. Therefore, staff recommends t~ying it for one season only so we can evalLiate costs involved and whether it is a success for one or two lats c~nly. Kelzenberg aslted what the liability to the City would be to allow residents to use these City owned lots. Cartney explained the Lcague ot 1'/IN Citics said t~he ~ity's Ins~~r~nce woulcl eover the Iots. Herringer asked if the expense for the backflow preventer is an annual expense, or a c~ne-time cost. C'lark statec~ it is a~ne tilne cost. Peters~n asked why a meter is ~~zeeded. C1ark said it is o~nly far tracki~lg ~u~~~~s arzd that ~~~~ is us~~ at ih~ s~t~ 6~i RES~i: voir B1vc'~ a1sc~. Nawroeki asked what the purpose was for setting up a 501 C3 non-profit. Graee Lee said it would be necessary in order to qualify for future gra~nt money. Yau don't ileed to be a non-profit to start a community garden, but you would if you seek funding assistance in the fl~ture if this project is successful. Fehst said he thinlcs a list ~f people wha wish to help with tl~ese sites shoulc~ be pr~vided to the City tct ensure th~re is ~nough help ta maint~in tlz~ gardeils. Ca.rtney said a list wo~ild be required tor those havin~ a right tc~ access the gardens as part of the agr~ement signed with the City. Motion Uy Diehnz, seconded by Kelzenber~,~ ta appt°ove a cornrrzur~ity garden p~-ivately rnc~intaine~' and ope~°ated hy Gr•aee Lee anc~/or Mary 7holkes crnd authorizes stcrff to en~ter i~ato an agreement for t~he ,same fvN two CiCy owned lots. The principals will corne in and sign an agreement for one season. All czyes. MOTION PA.SSED. The consensus was the City would provide two lots, one being 82$ 40t~' Avenue and the other at 4235 Washington Street. Water would be provided to 828 40`" Avenue by the hydrant on site. The City will install a meter and back flow preventer. The other 1ot would need to use rain barrels. Mayor Peterson said he would volunteer to help till the lots if needed. EDA MINUTES PAGE 6 MARCH 23, 2010 Market Study for 47`~ and Central Ave Rental Proposal- The development team for the rental propos~l at 4'7`~' a~1~i Centr~l Avenue com~nissioned ~ li~nited market study. The creation ol` this document was based on the desire of the ~L~A t~ corroborate the ability to c~nstruct the proposed development and wllat Ievel ~frent stn.icture is achievable. Clark explained the pi~rpose of the meeting is to give the EDA a chance to inf~rmally discuss (meaiun~ that this is not a published public hearing but notifications were sent out to all individuals that have been involved to da~te, including parties on the 350ft. notilication list) this proposal and to have a c~uestioll and answer period. This proposal, along with the Site Plan and Minor Subdivision (which was approved by the Planning Cc~mmission on a vote of 3 ta 2) will be presented to the City Council at their Api-i1 12, 2010 r~leeting. Clark also tald members that the changes were made to the Fourth Amendment ta the Developinent Agreement removing the "rental Ianguage'~ as discusscd at thc Iast meetin~. He informed members that Mr. Klober has si~ned th~ agr~e~ne~~t. 3ack Boarman made a brief presentation r~g~rding the results of the lin~ited Market Study that was done. i~e said the marke~ s~tuciy indieated that a rate af $120/sf tc, 01.4~/sf ~ould be su~5~ar`~~~~i in this area. He said the surrounding area has sufficient employlnent to attra~t the right age grc~up. Within a five inile radius there are 50,000 employees to draw from. C1early tl~ei-e woitld be a market for this type of housing which currently is unavailable. The study indicated the project has the right number of units, the right rate range, sufficient people to draw from, and the right location witl~ nearby freeway access. ~e is contident ti°om the information gatllered tllat ivith goact nzarketing, these rat~es wo~iq be on thc low ei~d, and coula be higher. ~ain Newberg tram Joe Urban Inc. was present to ai~swer questrons. Diehm said she understands why the basic cancept shauld work well. Howevcr, sl~e had a problein with some of the statistics in the report. She said the vacancy rates for the surrounding area trom 2008 to 2009 went from 4.9% to 7.3%. During that saine time, Columbia Heights' vacancy rate went from 4.7% to 9.1%. Our vacarlcy rates are higher even though our rents are lower. When comparing this YT'v~~Ci iv t~'ic CiiiTcT i1Vc Yii~j~~iS i.tScCi iii ~Zii; Siuu'y', S~ii, ~LieS~IGI2S iivJJ iiie`y' iiiiiiiC ~e^v~~~ :'Jiii ~2j' :21~~;:. rates for smaller units, especially in Columbia Heights where we are already experiencing the higher vacaney rates and lower rents. She Lised St Anthony as an example where the rates are generally $.76/sf to $1.39/sf and are generally larger units. Newberg said the figures he indicated are in line with other developments. If the finishing is nice, smaller units can bring higher rates. People tend to look less at square footage of the unit, if it is designed well and has quality ~inishing. Diehm asked why someone would choose Grand Central over an apartment at 5t. Anthony for less money. Boann~n said it wonld depend what is available at the tiine someone is looking. If St Anthony is full or doesn't have the size unit someone is looking for, they would naturally look at these. This prc~ject won't be done for a couple of years, and hopefully in that time, employment will improve, and new apartnlents will attract single young prc~fessionals, which we need in the arca. Ncwbcrg estimates that 60% of these units will be occupied by single people. EDA MINUTES PAGE 7 MARCH 24, 2010 Diehm asked if the five used in the comparison are the closest to what our project would be like. Newberg th~ught they were ~nd he was comfc~rtahle with the comparahles used. Newberg said thEre are few comparisc~ns available fram the Fridley/Cohunbia ~Ieights area. They tend to be smaller buildings and much older, so it is hard to compare to this type of project. New units, in large buildings, with an~enities and security tend t~o draw young, single tenants. The older, lower priced, 2 and 3 bedroom units nvw availablc tend to draw families and income restricted tenant5. Diehm asked if Springbrook Apartments in Fridley were used. He said they weren't as that complex is probably 15-20 years old already. Herringer asked if Newberg considered the Missisippi River as a natural barrier siilce he didn't use any comparisons to the west. Most of the ones used were to the east. Newberg said it is considered a barrier and thcre weren't as inany colnparables to the west to use, as they are mostly older also. He als~ picked comparisons that ran along the 694 corridor. Herringer also f~iind it difficult ta believe someone would pay more for Iess square f~o~age. Newberg artd ~aarrnan said they will pay more fc~r less iFthey ~re perceived tc~ be nieer. Newberg said the median income withir~ a 5 tnite radit2s is ~Zigher t~iai~~ yc~u t~iink. I~E'c~eli~v~s ,it would be a~otit $50,O~C siri~~ ~ve d~°a~v fro~i3 ~~~ivzzi~~vii, T~I~~trc~r;c;, an~ the meciic~l facilit~ies in Arden F-Iills, With the ~resent housing we have available, these people will not rent heie because we have nothing to offer in the type of~ hausing they wish to be in. Fehst asked if they could obtaiil financing with t~his limited Inaiket study. Boannan said no, the lender would need a more in deptlz ~IZalysis and more factors to be incliided in a study to satisfy their requirepnents. l~ut the results ot this stuciy give theyn optiyrtism that tnere ~s a mark~t ~tor this type ot proj ect. Nawracki sard he tmderstands the atti°actton of l~aving a new unit. But what happens after ten years, when this woulcl be eonsidered an old building according to the current study. He said he believes size daes enter into a decisi~n tc~ rent a tlnit ar not. Boarman said the Cominission needs to Lulderstand that this is a transitian to the new urban life style that is happening in our soeiety. When asked if this project were built in Arden Hills would it bring a higher price point. Boarnlan stated he didn't think it would because it would be further from downtown aizd from the freeway. He sees the location of this project being the big draw. Herringer asked whether sn~aller units malce for more turn-over. Woi1't tenants in a studio apartment inove out sooner than someone in a one or two beciroom unit? Boarmail said it has inore to do with an age ~roup than the size of the unit. Tenants in these types of projects usually have leases for one or two years. The targeted age group of 25-35 year olds face life changes such as job chan~;es, inarriage, families, and they tend to move on because of those reasons, not the type of unit. Since most of these units will be rented by one tenant, there should be less problems. Bigger iinits with more people tend to be Inore of a problem than the single ones. EDA MINUTF,S PAGE 8 MARCH 24, 2014 Herringer asked who the developer is in this project. Boarman said BKV is the architect, and the current owner Dave Klober has partnered with Clark Gassen to develop the site. Generally they would for~n an LLC' as part of their developm~nt agreement ancl nlay take on more partners to tinance the project. He said it would take approxlmately 12 months to tinance anci ciesign and anotner iL montlis to build. He said oi~e advantage this site has is that the site is constr~~ction ready. This is a tremenciaus savings to help inove the project along faster. He was asked how soon the second building would be constructed. Boarman said a certain percentage of tlle first building mi~st be rented in order to start the second building, but they would want to do this as soon as possible because the success of the project wotiild require it to make it sustainable. Boarman said if this project is voted down, a different developer may come in with another similar plail, and that project will have to be considered also. The Zoning Ordinance does not differentiate between rent~l and condo buildings. I~e said home ownership is reverting back to the same percentage as ~t was in the mid bU's. The shift has cycled and the number of people renting is increasing. Boannan saicl the current high vacancy rate in Cc~lL~mbia Heights is dz~e to pec~~le leaving the community, the ecanomy, job 1oss, and families daubling up. ~1vai1abilifiy o~ quality ren~tal is nc~t availa'dt~ ~~~r~. P'eGpl~ witiz in~~iai~ ~;- lzighei~ zz~cGr~~es ~6~'t ~art the kind of l~ousing we l~ave available ?n the city at the present tim~. Fehst said that larger complexes of rental have less impact on ciry services than the single family/dauble bungalow rental units. Diehm asked that the l~olice C~hiet a~nd Fire Chief be p~esent at t%e ~prii ~t2`~' meeting, or ~hai tney prepare an analysis on tl~e impact tl~ey thit~k this project would have on city services. She wol2ld like to hear their opinion an which types of rental cause more problems, larger rez~tal complexes vs. snzaller/singl~ units. I~elzenberg is for this prc~ject and tllinks the city needs tlus typ~ of 1lousing optian. He 1il~es the fact that undergrc~und parking is being provided and that they have done a good job meeting all the reqLiests. He is apprehensive about the ability to fill the buildings, but feels this is the right move for the city. He would like to see more yoiing professional people being drawn to the city to help revitalize it. Nawrocki said they have done a good job with design and const~ruction, but nc~te that the Architects will be gone after the project is done. it will come down to the owner and managers of tlse site to make it a success. He thinks it will be a struggle to keep the buildings full. If they can't maintain the occupancy, he is concerned they will drop the rent standards to keep them full. This is what can cause problems. He still believes ownership causes people to take better care of the property. A lot of effort was put into the previous plan and he thinks it was a rnistalce to separate c~Lrt the commercial piece. He asked what the square footage of the land is for the two building sites? Boarman wasn't sure, as the site plan infornlation was noC present far this meeting. Fehst told Nawrocki that info17i1ation would be included in the Plamling & Zoning report going to the Council April 12`n EDA MINUTES PAGE 9 MARCH 23, 2010 Mady's Site Discussion- Clark stated that on November 24, 2009 the EDA gave direction to staff to investigate the possible acquisition of ~vhat is coinmonly referred to as "1~1ady's Bowlin~ Alley Site" at 3919 Central A~e. Staff did not want to negotiate with Mr. Mady only as the property is held in a partnership, so any proposal v~~ould have to c~me from the Mady/Foss Partnership. Staif inet with Mady's legal i-epresentative in Deceinber and in turn, an initial offer was made to the City approximately three weeks ago. Staff has undergone an extensive analysis of a11 of the issues associated with acquiring this parcel, as agreeing to a given purchase price is only one of a number of items that need to be considered. Staff is not Inaking recommendations regarding price points at this time, however the EDA needs to be aware ol the following matters: 1) Acqtiisition of a property by a City entity, even if not done through eininellt domain, triggers relocatioli benefits. Staff l~as secuz-ed a~eneralized estiniate for these costs and is illustrated iiz the "Solirces and Uses" bud~et located within this report. 2) The potet~tial stumt~ling blc~ck fo~° this acquisitian is tlie ~xistirig lease at Dor1a Anita's (a Hispanic grocery store). The existing lease r~.tns through 2011 with a~our-year extension available unti12015. Any purchase agreement with Mady's would have to have a contin~ency that an agreement, acceptable to the EDA, would have to be sectired with the owner's of t~ona ~'~nita re~ardin~ new Iease pravisions. ~i'hey currently have 6,400 sf of space. 3} The initial offer is urlclear about who would operate lultil the end oFt~he t~hree year contract period (including who is liable for taxes and reeeives rent revenue). 4) If the EDA is tc~ proceed with this item a new appraisal on this property should be secured (an appraisal on this property was done in February of 2006). Staff has secured tw~ bicis fc~r this work: Patchin, Messner & Dodd gave a bid price ol $3,500 andNagell Appraisal and C'onsulting quoted $1,800. Soth ofthese appraisals will coinplete ~ sales comparison approach and exclude doing ai~ incc~me approach valuatian. 5) In order to understand the financial scope of t~his project staff has constructed a sources and uses budg~t. It should be understoad that this is an estiinate as a number of these itenls, especially the acquisition price, needs to be negotiated. Sources (Potential) d~~nn n ~oyv,v00 m____ r nv i i~irc~ yea~`'zlcuriie Si~eatri iruiri r r i~, 11 and 12 - Anoka County levy $110,000 FY 09 - Anoka County levy $300,000 Housing Fund $100,000 Fund 420 $70,000 TIF T4 Poolable Allocation $50,000 Special projects fund $1,320,000 TOTAI.~ EDA MINUTES PAGE 10 MARCH 23, 2010 Uses (Estimates-do not factor leasehold issues) $1,400,000 Acquisition $60,000 Interest $160,000 Relocation Benefits $50,000 Professional Services $50,000 Contingency $1,320,000 TOTAL Clark stated the relocation fees were less five years ago than they are now. Changes to State Law affected the cap on this figure from $10,000 to $50,000 per terlant. He stated this is an important parcel for the re-development of the south e~1d of the main corridor of ol~r city. Staff presented various ideas tor the process that would be follc~wed ior ctevelopment it this property is seeured. Staff seeks directiol~ on whether to proceed and to autllorize the securil~g of alz app~aisal. Questions from members: Fehst asked if t11e esnmates in tile "Uses" chart included a buyout 6f tlYe leases. Clark said they do not. Peterson asked if soil correction expenses were accotmted for. Clark said n~, because we don't lcnow what that figlire would be. Soil corrections would vary depending on what type of development would take place oi1 the site. Clark said appraisals are established on the highest and best use of the property which is the present use, therefore an appraiser would not discaunt it far soil corrections. If tile building as demo~is_h_e~ and re-~ev~lop~d, the City woulc~ face soil corr~ctiorz ~~st~s ~t tlz~t tir~le, ~etersan said it cauld t~ke a lot of ma~ney ~fc~r soi~ corrections, and ~as cancer~ed whether the Cit~,~ ~vould ever be able to recoup those costs. Clark stated a RAP" report is almost done on fhe site ~vhich would give us a better idea of what can be done on the site. Fehst said from previous dealings, we could possibly cap the site and develop for less if there aren't a lot of underground levels put in. I~ tlie EDA wants to obtain the site, we should start looking ior a developer who woltld build something the City approves of, get DEED grants in place, and to do a performa for the project. Nawrocki asked who owns the property. Clark said the site is owiled by the Mady/Foss partnership. He said Foss controls the upper floor of 14,000 sf and Mady controls the lower level. Nawrocki then asked who staff inet with. Clark said they met with Mady's attorney who was representing the Partnership. Diehm stated they may be willing to take less because there couid be tax benefits to the selier if they aecept less than the appraisal price, because the diifereilce would be considered a gift/donation. Staff should keep this in mind when negotiating. EDA MINUTES PAGE 11 MARCH 23, 2010 Herringer asked if a tenant could si~n away his relocation rights? Diehm said they could if properly written. Herrin~er asked if we re-assigned ownership to a developer wottld the deE~elaper then become respoilsible for relocation expenses. Clark said no, it would remain the City's responsibility. It was noted the Developer would also have to obtain the Heights Rental site in order to d~velop the entire site. This wc~uld be a separate issue froin the one before the Commissioil now. Szurek thaught we should get an appraisal first before we start negotiations. She nated the last one that was dane was approximately six years ~go. The members ~greed. C1ark stated he could get aecess to the btiiilding for the appraisal and will bring this baclc to the commissia~l at a later meeting. Mvtzorz by Szurek, s~conded l~y Willzarras, to aulhc~rizE~ staf'f to enter inta c~ canta•act ~vith Nczgell Appraisal and Consulting_for an appraisal not to exceed $`1800. N~awrocki wanted the appraisal to ta%e soii correetions into affect. Ciark said it ean't as ~ippraisers aren't qualified to deterlnine those eosts and the extent of the corrections needed could v~ry depending on the project. The last appraisal done was not adjusted for soil correetions either. ALL AYFS. MOTION PASSED. 5. ~DlO~Il~I~TRA'~'I~E ~Z~P~RT • Clark gave an update on the NHHI Senior housing project. He said HUD rejected the 202 proposal again. The appeals proeess also denied the project. Mike Bjerk~sett said lre will not re-submit a plan for this site again. • The grant for the parking ramp from the Met Council officially terminates April ls`. Staff will send out a default letter to terininate the Developr7lent Agreernent with Ehtashim Khoratty. • Staff inet with Developer Chris Little last week. He will bring a new proposal to the Commission at the next meeting. • Habitat for Humanity llas done two rehabs for ~noka County. They are now trying to purchase six lots from Anoka County to build new I-Iabitat houses on. Clark is concerned about having a concentration of Habitat homes in a small area of our city. It defeats the purpose of what the City has been tryin~ to accomplish. If t1~e commission agrees, he will send a letter expressing concern about using NSP manies to have Habitat build houses on all these Iots. The members all agreed this was a good idea. • Peterson would like staff to draft a letter to the Met Council thanking them for the extensions t~hey granted, and to let them know we appreciate their efforts. EDA MINUTES PAGE 12 MARCH 23, 2010 G. OTHER BUSINESS The next regular EDA meetiilg is scheduled for Apri127, 2010. The meeting was adjourned at 9:20 pm. Respectfully submittecl, Shelley Hansan Secretary EDA RESOLUTION 2010-06 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH 2O10 AND PAYMENT OF BI~LS FOR THE MONTH OF MARCH 2O10. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows a!1 receipts and disbursements, their nature, the money on hand, th~ purpos~s to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of March 2010 and the list of bilis for the month af March 2010 are attached hereto and made a part of this resalution; and WHEREAS, the EDA has examined the financiai statement and the list of bills and finds them to be acceptable as to both farm and ~ecur~cy. ~iOW, TFiEREF~RE ~E IY' F2ESO~iiED by ~he Board of Commissianers of the Caiumbia Heights Ecanomic Development Autharity that it has examined the attached financial statements a!~d l~st of ~i!!s, srvh~ch are attached herete ~r.~ m~ds ~ p~rt herPaf, ~nd they ~rp f~~an~ tQ be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of biils as presented in writing are approved for payment out of proper funds; and BE iT FURTHER RESOLYED this resolution and aftachments are ta be made a part of the permanent records of the Columbia Heights Economic Develapment Authority. Passed this 27th day of april, 2010. MOTIDN BY: SECONDED BY: AYES: i~ary reierson, rresideni Attest by: Shelley Hanson, Recording Secretary COLUMBI~ HEIGHTS ECONOMIC DEVELOPM~NT AUTHORITY (EDA) Meeting of: April 27, 2010 AGEN~DA SECTION: Consent ORIGINATINU EXECUTIVE N~0:3 DEPARTMENT: EDA DIRECTOR APPROVAL TTEM: Finaneial Report and PaylZ~ellt c~f Bills BY: Sheila Cartrley BY: DATE: April 19, 2010 BACKGROUND: The Financial Report is for the lnonth of March 2010, Resc~lution 2010-06 is attached for approval. RECOMMENDATION: Staff wil{ be a~ailable t~ answer specific questior~s. 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ITEM: Community Garden request -4147 7t~' BY: Sheila Cartiley BY: Street - Grace Lee DATE: BACKGROUND: At the March EDA ineetiilg the EDA approved two commun,ity gardens that will be privately operated. The tirst garden approved was for 828 40`" (SE corner of 40~~' and Jackson) which is managed by Mary Tholkes and the secc~nd garden approved is located ~t 4235 Washingtc~n Street which is lnanaged by Roseanne Rivers. Grace Lee is reqliesting the use c~f the EDA Owned lot at 4147 7t~' Street for a comtnunity garden, whicll ~x~ould be ~r~vately o~erat~d. ~'race I:,ee ~~i~l be the Garden 11/lanager and she haU ~~o~t 10 families a~~d individuals interested in usin~ this 1ot. Rain barrels will be used for watering. The eity's Public Works ~.F',~~.:'t~~::t L:W.S ~tz7~t(.`,~?P~. ~~~I~:' t11P t~r~~t~Y ? lZl~~?'~?Pnt frnm ~~'iP tlii~t' Y[l f}1~, ?YiCJWPt'~ t~'IPl'Pf(lrP.~ f~1P, ~1t~7 Wt~~ not be able to ti11 tlus site. RECOMMENDATION: Staff recc~mmends the EDA approve the lot at 4147 7t~' Street as a community garden privately operated by Grace Lee for the year 2010. t'~Cr'vi~Yi~i~i~~Ei~ P~G'~'Ii~l~: MOTION: Move to approve 4147 7`" Street as a community garden and designating Grace Lee as the community garden manager. attacnments: r,-ma~i rrom vrace EDA ACTION: Page l of 2 Sheila Cartney - 4147 7th St. NE ~~ , . , . ~ ~ ~ ~ .~ . ~~, . ~ ~ ~, _ ~ ~ , ~ . v~. ~. .. ~,. _ , ,~~ ~, ~ From: "Grace Y. ~ee" <glee1010@hotmail.com> To: <sheila.cartney@ci.columbia-heights.mn.us>, <scott.clark@ci.columbia- heights.mn.us>, <gary.peterson@ci.columbia-heights.mn.us>, <robert.williams@ci.columbia-heights.mn.us>, <bruce.nawrocki@ci.columbia-heights.mn.us>, <tami.ericson- diehm@ci.columbia-heights.mn.us>, <bruce.kelzenbergC~ci.columbia- heights.mn.us> Date: 3/26/2010 ~. i :47 AM Subject: 4147 7th St. NE Dear Scoit, Sheila and Council members, I am writin~ to rec~uest to be actdecl to the EDA's agenda for its ~pril 27t~ meeting. At that time, I would like to request the use of the lot on 4147 7th St. NE for a cominunity g~rden. I ciu7ently have about ten families and singles who will support this lot - one of whoin is a prafessional lal~dscaper and anather one of whom is a rnaster ~ardener. Our group of ten homes is inter-generaticnal, including chilc3ren, young adults and elderly residerlts, alI of whom live witl7in a bloek c~f 41~7 7t~' St. The Iot o17 7th does not have any sod, and the city has not yet throwll dt~wn any seed. Wc woulcl lilce to turn this dirt lot into a trLte cor~ununity garden, which wouid save the city time anci inoney irom nc~t naving ~c~ seed it and eut ~he gras~ all sut:~mer. Although there m.ay be so~~e c~n~er~~ in having three ~~tizen-~~n community gardens in the first ye~r of such an endeavor, I believe that we l~ave responsible people, not to mention a professioilal landscaper and a master gardener who wauld support a community garden on 4147 7th. We wauld not want to wait until next year, as right now would be an ideal time to start, given tlle season and given that the city has nat yet put down seed on this dirt lot. T'herefare, if we were approved to stai~t a cainnlunity garcien no:~%, w~ waui~ nc~t be un-dc~ing ai~y wc~r3~ that 1~as been uone. As for water, we wonld use rain barrels. There are many roof tops with gutters near this iot. In ease of a dry spell, ~e llave baek-up plans, wl~ich I wc~~ilci ~ike tc~ discuss at the FDA meetir~g. Further, as with the precedence set with t11e other two EDA approved gardens, we would be perfectly fine with ~oing year-to- year for approval. I have a sarnple Lease A~reeme~~t to that effeet, which I can brir~g tc~ the EDA meeting or e-mail beforehand. I have attended a workshop on startiilg a community garden with the Twin Cities-based Gardening Matters. rf,r~P ~~tl~~ 4~ 47 7t~' ~~, ~~t ?c apnrnved; w~ wi11 h~ve a planning meeting with all the residents to wark oiit the design to~ether. It wi11 be a true community effort with everyone being part of the process and having ownership. I have a sample Community Gardener Agreement, which all gardeners would si~;n. This too, I can bring to the EDA meeting or e-mail beforehand. I understand there may be some confusion as to wlry I am requesting another lot, when the EDA has already approved two. Please see t11e belc~w tiineline as an explanation. 2/23 - I e-mailed City Couneil nlembers, requesting use of the tat at 4235 Washin~ton for a community garden. 3/3 - T met with Sc~tt and Sheila. They recommended that I rEquest the use of the lot at 4147 7th St., because it is too narrow upon which to i°ebuild. So, the EDA would not have to worry about ever having to fi1e://C:ADocuz~7lents and Settings\sheilac\Local Settings\Tcmp~XPgrpwise\4B~1C9EE1echgwl0... 4/16/2010 Page 2 af 2 take-back the land in tihe future, so to spealc. week of 3/8 - Thinlcing that the lot on 4147 7th St. would be requested from the EDA, because that was the lot~ ihat Scott and S~ieila had r-ecommended to me, I went to every house ol1 that bloclc, leaving flyers to gather commllnity interest. In total I have abc~ut 10 homes within a block of 4147 7th St. who would slipport the garden. T can bring a formal list to the EDA meeting. approximately 3/15 - Scott informed me that Mary Thollces was also interested in starting a eoinmunity garden and siiggested that I partner with her. 3/18 - I met with Mary Tholkes. She infornled ine that Scott and Sheila had recoinmended to her the use of the lot across from t11e Iibrary - not tlie lot on 4147 7th St. I also discoverecl that her goal was to rent out the conlmunity garden lots tc~ clients of SACA. While this is a great objective, it was not in line with my obiective for a community garden, whieh was to have an opportunity fc~r neighbors who live in close proximity of one another to come together to garden together, get to Icnow one another, build commtiinity and help reduce crime. 3/19 - I e-m~iled Scott and Sheila t~ let them know that Mary's and my objectives were different, and asked if the lot on 4147 7th St. was still an option. Scott replied, "... I am of the opinion that sinee this is the first year of having a"private" comnlunity garden (meaning one that is not op~rated by the City) that is difficult, if nat impossible, to do this wit~h two Iocations..." Fur~her, Sheila replied that she had already serlt out thc EDA ~~eket ai~d that 1 w~uld h~ve the opportunity to ~oice my i~iteiltiorls at the EDA meeting. ~3ecause of the above, I thought that t~he EDA would be inclined to only approve one lot. 1 also thought tllat since rhe EDA p~cket had already be~n sent out, that it was too late to request the lot c~n 4147 7th St. at the EDA meeting. 3/23 - At the EDA zneeting, the EDA approved use of the lot across ~~`rom the Iibrary (1Vlary Tholkes j and the use of the lot on 4235 Washington (Roseamle). To be hoilest, I was very st~rprised that Roseanne was given the opportunity tc~ request the lot oi1 Washington, because I thought one IZad to ~o through the Community Development Department to get an the EDA's agenc~a. Nanetheless, I'~n ~lad that Roseanne got approval to use ~~~~, Ic7t ot~ ~vJashi~~~~ti~a~, ~s i'i~1 su~-e st~~'11 du a firbe j~~'~ c•f ~iirr~i~z~ a~ i~io a~,a~rd~r~, A.tt~r the meetir~~, I went baek and spoke with my neighbors and let them kno~v what happened at the EDA meeting. When they faund out that the ~;I~~i had granted use of two lots, and nc~t just ~ne as the C'amm~~zity De~c1~~i-~~ei~t I7epartmei~t had recc~Inlnendecl, w~ were ~li pretty surprrsed. This is not tc~ imply that I had been misinformed in any way, because I'm sure that Scott and Sheila were also surprised ~hat the EDA appioved the use of two lots. Nonetheless, my n~ighbc~rs a1-e sti11 very i~~nterested i~~ the lot c~n 4147 7th St., as they believe it has more useable gardel~ space and gets more sun than the 4235 Washington lot. Plus, because t11e lot on 7th is the lot that Scott and Sheila had originally steered us towards, that is the one and the area in which we put our efforts to gather community interest. Sincerely, Grace Lee 4209 Washington St. NE The New Busy is not the old busy. Search, chat and e-mail from your inbox. Get_started.. file://C:ADocuinel~ts anc3 Settings\sheilac\Local Settings\Temp\XP~rpwise\4BAC9EElechgwl0... 4/16/2010 ~1~ ~ H C C ~~~, y~,. ,~e,~, s~~„ y EIGHTS O~UMBIA ITY OF Councilmembers }toberl A. 14~111 fans 590 40°i Avenue NE, Columbia Heights, MN 55421-3878 (7G3) 706-3600 'TDD (763) 706-3692 i3r~~ce No„~rucki Tarmnera 1.3/ehnr ! isit our wehsite at: }vrti~x~.ci.coliu~rhia-heights.mwi.us ttr«~E ti~l~e~,ifer,~ c~cy m~~~:~g~~~ Waller R. l~'elist Columbia Heights Coinmunity Garden Rules and Regulations 4147 7t~' Street Garden Manager: Grace Lee This cominunity garden is to be managed by Grace Lee, she may have additional rules and regulations that pertain to this particular garden, however in order to use a city owned lot for the garden the following rules apply, by signing this document you agree to these rules in addition to any rules iinposed by the garden manager. This agreement is valid for the 2010 grawing season. By Sigr~ii~g tl~is ~laeun~ent I a~r~e to the fo11o~~~ing: 1. This garde~ i~ ~eing ~a~e~ for the gr~w:~n year cf 2~J10 witlz t1~F ~2i2derstanding th~~t the Iot might be developed at a later date '~, i~~1~ h~yP ~r~~r,Pth;,,g pl~nt~c1 Ln my ~arden plot by June St~' of tl~is year and will keep it plallted a11 suinmer long, supplying IZ1y own seeds/plan~s a~~d necessai•y garden tools. 3. Gardezls inust ~7e cleared and cleaned at the end of the growing season. All stakes should be pulled and ground ready fc~r fall tilling by October 15, 2010 4. I wi1111ot use fertilizers, insecticides or weed repellents that will in any way affect other plots 5. a dvill ~lant cnly annuals in my g~rde~ ~1~t b. Gai-deners a~ree to keep the ;arden and garden edges fre~ ~f weeds, diseased plants, insect- iniesfed piants and over-~i~~ ve~eiables 7. I)iseased and infected pl~~~ts must be removed frarn ihe gar~en and disposed ot properly 8. Be respectful, tall cr~ps, spreading crops ete should be planted as not to s~hade or encroach atother ~arden 9. Gardeners are expected to communicate with neighboring gardeners to work out borders, weed issues and si~e of plant issues 10. I will keep my garden free of garbage and litter 11. Growiilg or issuing illegal substances in the garden will lead to immediate expulsion of the plot and turned over to the police 12. I will not plant, weed, water or harvest from any other members plot without permissian 13. I will pick only my own crops unless given pennission by another user 14. Gardeners are reminded to use good personal safety practices when visiting a garden 15. Children are welcome at the garden when accompanied and fu11y supervised by an adult 16. Dogs and otller family pets are not allowed in the gardens 17. One 18"xl8" sign for the entire garden is allowed as approved by the gardeil managei and the city 18. Gardcn fencing is allowed as approved by the gardeil mana~er and the city 19. Coniplaints, policies and mediations are the responsibility of the ~ai°den manager 20. I understand this is a teinporary Lise of the lot and at any time the City can redevelop this lot at anytime regardless if there are plantings or not I'age 2 Community Garden R~zles and Regulation 21. I understand that neither the ~arden manager nor the owners of t11e land (the city) are responsible 1or iny actions. I THERFFOR~ AGREE TO INDEMNIFY AND HOLD HARMLESS THE GARDEN MANAGER AND THE CITY OF COLUMBIA HEIGHTS FOR ANY LIABILITY, DAMAG~, LOSS OR CLAIM THAT OCCURS 1N CONNECTION WITH THE USE OF THE GARDEN BY ME OR ANY OF MY GUESTS i~iiiii 1-v~iTii~.: Signature: Date: Phane Number: E-mail Address: COLUMBTA H~IGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: March 23, 2010 AGENDA SECTION: Biisiness Items ORIGINATING EXECU~TTVE NO: 5 DEPARTMENT: EDA DIRECTOR A png nvA t ITEVI: 37°i and Central BY: Sheiia Cartney BY: DATE: March 9, 2010 BACKGROUND: On June 24, 2008 the City of Columbia Heights and the ~DA entered into a Contract for Redevelopineilt with 37`~ and Central LLC to redevelop the soL-thwest corner of 37t~ Avenue and Central Avenue. The redevelopment plan included a 9,000 square ~oot ec~mmercial building. This project has had public fnancial assistance. The following assistance was approved as part of the Development Corltract: $100,000 Anolca ~'ounty EDA Le~~y for land acquisitio~~ costs $75,000 CDBG fc~r land acquisition costs -$3Q,000 CDBG demolition $30,000 State Aide Road funcls fc~r turn lare $133,198 Land Vall~e Write clowns -$21,800 interest write down for loa~1 Te±~~ i:~ bra:~± ar.~ ir.-k:r.~ ~ss:s±a::ce ~~gg,A4~. On M~y I 1, 20(~9 the EDA Ainended the redevelopment contract to change the coi7lmencement date froln May 1, 2009 to Ma~ l, 2010 and to change the completion date fram January 1, 2010 to January 20ll . These dates will need to be amended ag~in. 1~t~o~% I~~i~~t~S~,~, Chris Little w~t~ld like to discuss a new prc~posal with EDA for 37t~' and Central. The nevv concept would include affordable senior rental apartment~s, which would ~be Iacated abc~ve retail space. Chris would also like t~ discuss any bonds that may be available for this prc~posal and any deveiopment contract ainendments that ~re necessary. Chris will discuss the proposal and the market study at the meeting. KECOMMENDATION: Staff seeks direction from the EDA o~1 the praposal and cantract amendments Attactnnents: L,etter iron~ l:hr~s L~ttie, Market ~tuciy, Lor~ceptual c~raw EDA ACTION: ~_ ~ ~. ,, .. x *. n 2 ~ ~ ~ z ~ ~ , r ,~~_ ~ .. . ~ CO161P~HENSIYE QF.A1. ESTATE f}RGAN13."RTIOFLAL BaLUTTONS April 19, 2010 Ms. Sheila Cartnev Assistant Commusliry Development Director Ciry of Coiumbia ~Ieights 590 - 40th Avenue NE Columbia Heights, MN 55421 Re: 37~" and Central Redevelopment Dear Ms. Cartney: I am writing to respectfully request a presence on the upcaming agenda for the City of Columbia Heights Economic Development Authority (EDA) Ineeting to be held this comiilg Wednesday, Aprii 2"7, 20I0. The ~plirpose of~ my rec~uest is to discuss CR~S Companies' redevelopment project at 37" and Central, also known as the Heigllts Gateway project. More specifically, we woiild like ta discuss progress and actions takeil to date to de~elop the site and ha~~e an open discussion regarding the f~llowing items: • Status and extension of the current Development Agreement betweeil 37t~' and Central LLC and the City of Columbia Heights Economic Development Authority. a ProposP~1 ~~v~lo~?m~nt cl~~ng~s, whi~h includes a senior housing and retail rnixed-L~se develcrpm~nt. = Ar:y '~o~~ds tt~ai rr,ay ~e ~~ai~a~le f~r the ~rc~c~seU ~~o~ccG sc:,p~. Although we continu~ to face ~ough ecanomic times, CROS Companies is dedicated to developin~ a successful prc~ject at 37`~' and ~entral. VVe have enga~ed a full timc broker (Upland) that has been ac~ively marketing the site over the past year and a half to potential retailers. VVe have had limited interest by retailers for a number of different reasons. The lack of illterest ranges fi•om simple inactivity of major retailers, to asking rental prices, to tl~e demo~raphics of the area. Rather than continue down of patll of intense resistanee in tc~ugh economie tiines and in order to make the project more econolnically viable, we have decided to broaden the use of the site and increase density in an effort to both bring down retail rents and provide a product with demand. In March of 2010, CROS Colnpanies engaged Maxfield Research to perform a market study (see attached) to determine the market demand for affordable senior housing. Gongruently, we consulted with Gori & Associates Architects to put together a conceptual site plan and rendering (see attached) for a senior housing and retail concept. The result of the marlcet study revealed that there is a deinand in the market study area for Con-trarF~r:~stvl~ ~ Rcni 1 5rn~~e (()itc;.~Niz~1~ iot~~Ai_ ~ Sr>i U~rt~>~s 552 L~~Mrn~i<i i.nnr ~ Mt~vhr,v~oi,ls ~ MN ~55<421 (763 } SGR-7276 - l7FPICL ((6 (Z 1237-1 105 -- MOBILE j CH(tISLI"fTLI ~1~CROSC'OA4PANIGS.C0~4 , _.~ m . , . ~ ~ r , C70MPQEHENSiVE QEAl. EST'/41E CtRGAMIlA110ttAI.'d~Cli.LLlYftNS _55-60 units of affordable senior housing with an income limit of 60% median incoine. The site plan and rendering prepared by Gori & Associates Arehitects shows a conceptual plan of how the site cotild aecommodate up to 60 units of housing. This is only a concept at this point and certain modification can be made to accommodate both the City of Cohimbia Hei~hts alld the market studv's recominendations. We have also engaged Crestview Senior Communities (Crestview) to gaiige ~heir level of interest in participating in this project. CrestvieW has preliminary interest in managing the senior housilig component of this pl-oject as well as allowing the use ot their naine to help 1~larket the project. Shirley Barnes of Crestview is planning on being present at the upcoming EDA meeting. At this point, CROS Cc~mpanies is seeking feedback from the EDA regarding a project of this scope and an extension of the Develapment Agreement to accommodate this project. The market stud_y prepared for tlus site concludes that demand for a 55-60 unit affordable senior housing project would be sufticient for a 2012 building opening. As such, it is CROS Companies request to extend the development a~r~ement to allaw for a construction start date of 3`a quarter 20ll and project completion date of 2"d quarter of 2012. We would welcame any feedback from ihe Staff and ~;i3,~ re~arding tne proposed projeci and appreciate all of your consideratioil. ~e are committed to the 37r" and Central development and are excited about the proposed changes and the feedback we've received tc~ c~ate. Any questions can be directed to me by e-mail at chris.little<c~crosc«inpai~ies.com or by ph~nP a+ (~? 2~ 237-~ 105. Thatak yau for 3~~~r t~~ne an~~ ~onsi~erat~on ~n~ I lo~k ~~r~rar~1 to upcoming discussi~lls. Regarcls, Christopher Little CoM~a~~HFrvs~~ e; RF~~. E s~rnre ~ C>rzc.aNiz~Tronn r. ~ Soi_u~n~~,~ws S52 L(7MiANK1 I,ANF, ~ I~QINN~:aPOLIS ~;V1N ~ 5j~21 (7G3 } 568-7276 - Or~F~cr ~(612) 237-I ( 05 - n4<~su r ~ cHR~sL~~~~r~E «)cczuscuti~Nnwr:s.coM MEMORANDUM TO: Mr. Chris Little 37`h and Central LLC FROM: Mr. Brian Smith Mr. Jay Thompson Maxfield Research Inc. RE: Prelimillary Demand Estimate for Affordable Adult Rental I ~ousing in Columbia I-Iei~;hts, Minnesota Introduction/Purpose and Scope of Kesearch This lnemorandurn provides a prelitninary ass~ssm~nt of ttze nlarket potential for a senior ren~al housing development to be developed izi Coluinbia Heights, Mii~~esota that ~vould not otfer any services (independent with no services, or "adult"). As we understand, the proposed Site loca- tion is at the northwest corner of 37`~' Avenue NE and Central ~venue. T~a~ ~?~etl~c~~~;lc~g~ ~se~ t~; culcz~late demand ir tt~is in~m~ranc?u~~ is pr~~riPta:y t~ l~~axfiel~ RP- search but is consistent with methodologies used by analysts throughoi~t the seni~r housing in- dnstry. It is impc~rtant tc~ note t1Zat ~iemana estimates and c~nchxsic~ns c~ni~in~;d he~eiri a~e ~~~- liminary, ~ncl are inte~ldec~ c~n1y to ~broadly assess tl~e depth of dem~nd for afford~ble adult h~us- ing in Columbia Heights and to determine wheiher an additional development could be stip- ported. A more thorallgh investigation of the charactet•istics af thc; ~olumbia Heights Market Area, outlined in a Full Marke~ Feasibility Study, would reveal more specific factors that may impact demand and appropriate market positioning. Th;s „~P~~,nrancl_um c~~li~,~~t~s th~ primary draw area ("Market Area"1 for senior housing in Co- lumbia Heights and presents an overview of the demographic and eeononzic eharacteristics of the Market Area. It tllen inventories existing and pending senior that wc~Lild be competitive with the subject development. Demand for senior housing is calculated based on the demographic, eco- nomic and competitive factors that would impact demand for additional units in the Market Area. Our preliminary anatysis concilides with an estimate of the total IvTarket Area demand that would be captured by a development on the subject Sitc and provides preliminary conclusions based on oiir findings. 612-33&0012 (tax) 612-904-7979 615 Pirst Avenue NE, Suite 500, Minrieapolis, MN 55413 www.maxtie(dresearch.com Mr•. Chris Little Apri1 12, 2010 37t~' and Central LLC Page 2 Market Area Definition Based on the locati~n of the Site, transportat~ion roiltes, inan-made geographic bolindaries, the resident draw area of Existing senior developments in Columbia Heights and our experience of the draw areas for senior housing, we define the primary draw (or "market") for this Initial Mar- ket Assessment as Colu~nbia Heights and Hilltop, the southern portion of Fridley below Missis- sippi Street (Census "Tracts - 512.01, 512.02, 512.03, and 512.06), and northeast Minneapolis north of ahout 18t~' AE=enue (Census Tracts - 6.01, E.03, 1 l, 17, 1005, 1012, 1018}. The ?1~Iap below ilhistrates the Market Area (highlighted in orange). We estimate that approxinlately 75% of tize market support ~lor affvrdable adult rental housing in Colu~nbia Heights would come from this Market Area. T11e remaining portion of t11e demand (25%) will come from outside the defined Market Area. These individuals will ulclude people currently residing just outside the Market Area who have at1 orientation to the area (i.e., church, doctar, ete.); people who once resided in the area that desire to move back to be near fri~nds and fainily, as well as parents of adult children living in the Market Area. MAXF[ELD RESEARCH INC. ~alumbia Heights 1Vla~ket ~rea Mr. Chris Little April 12, 2010 37r~' and Central LLC Page 3 Older Adult (Age 55+) Population and Household Trends Table 1 shows the age distributic~n of pe~ple and households age 55 and older in the Market Area. Data in the tables is provided by the U.S. Census for 2000 with estiinates and forecast for 2009 and 2014 by Applied Geographic Solutions, and national demographics tirm. ~lhe toiiowing are key trends observed in tne Ivlarket area: • The popi~lation is aging through the life cycle and older adult and senior age cohorts are grow- ing rapidly. Between 2000 and 2009, the Market Are~'s older adult and seilior population (age 55+) is estiinated to have grown by about 2,290 people (+2'7%}. • The target market for affordable adult senior housing is seniors age 65 and older. Between 2000 and ZQ09, this age eohort grew by roughly 315 people in the Market Area, or 4%, Over the next five years, an additiana1367 seniors age 65 and over (+4%} are farecast to be added to the Market Area. TABLE 1 ~g+ POPULATION & HOUSEHO~,D AG~ DIS'~I2I~U'I`dON iiil.~Ji~ri$iH i~El~~ i ~ Pv'Ir1~~KE'T ~iiEc~r~ ~ 2000 to 2014 ~ POPULATION Age I 1 11' 1 ili II' 11' I 55 to 64 4,913 6,491 7,237 1,578 32.1% 746 11.5% b5 to 69 ' 2,163 2;336 2,b87 ' 173 ' 8:0% 351 15.0% 70 to 74 2,073 1,946 2,085 -127 -6.1% 139 7.I% ~~75to~79 ~''1s806 ~~~ l;b$~7 ~~` 1,~49 ~~ -119~~~~' -6.6% -3$ -2.3°/a 80 to 84 1,319 I,419 1,323 100 7.6% -96 -6.8% .~~~ C)J "~" ~~ ~~.. . 7 t 1~~~ ~. 1 jG~ t t~L J.G ~~. L7V ~. ~~ ~7.7~16 i 1,~ ~V.~~~4 Tota155+ 13,245 15,140 16,253 1,895 14.3% 1,113 7./~% Tota165+ 8,332 8;649 9,416 , 317 3:$°fo 367 4.2% Tota175+ 4,096 4,367 4,244 271 6.6% -123 -2.8% Tot. Po . 55,883 56,089 55,122 20G 0.4'% -967 -1.7% -. HOUSEHOLDS A e 111 I' I III II' I I 55 to 64 2,934 4,286 4,621 1,352 46.1% 335 7.8% 65 to 74 2,722 ' 3;410 4,157 ' 688 25.3°l0 747 21.9°Jo 75+ 2,927 3,176 3,228 249 8.5% 52 1.6% Total 55+ 8,583 ' l0;$72 12,006 ' 2,289 ' 26'.7% 1,134 10.4% Total 65+ 5,649 6,586 7,385 937 16.6% 799 12.1 % Total '75+ ' 2,927 3;175 3,228 ! 249 >~ 8:5% 52 1.6% Tot. HH 24,447 25,520 24,888 1,073 4.4% -632 -2.5% (S~urces: U.S. Census 13ureau; Applied Geograpl~ic Solutions; Max~Celd Resea~rch Ine. ~ MAXFIELD RESEARCH INC. Mr. Cl~ris Little April 12, 2010 37t~' and Central LLC Page 4 The 1Vlarket Area is an established urban area in the Twin Cities Metro and is fully developed. with some redevelopment occurring over the last decade. Urban and first-tire suburbs gener- a11y have an older poptiilation where seniors have resided for inany years compared to newer suburban areas th~t have a yoimger population. Ilence, the pro~portion of the total population that is age 55 and older is high (estimatecl at 27% in 2009, compared to 22% metrowide). The growth rate in the household base, which sheds insight into the number ot housing units demanded, is hi~her than the ~rowth rate i~~ tl~e pop~lation base due tc~ declinil~~ llousello~d sizes. Between 2009 and 2014, the Market Area is projected to abou~t 800 households ages 65 and over (+12%) compared to about 370 seniors ages 65 and over (+4%). Older Adult and Senior H:ousehold Incomes Table 2 shows incomes iar c~lder aduit and senior households in the Market Area in 2009 and 2014 based on information provided by Applied Geographic Solutions. The data in Table 2 helps determine dei~~and for senior housing based o17 th~ size of the market at specific incoine levels. It is iinportant to nc~fie that the data does not acc~unt for the asset base of senior house- holds or supplemental income that a senior household could gain from the proceeds of a sale of a home or from c~ntributions from family members. Z'he income data, adjusted to account for sen- iors who ean itse home sale proceeds, is incarporated into ot2r denland ~alculatians, wl~ich are presented Iater in this memorandum. Studies have shown that senic~rs ~re willing to allocate up to 40% of tl~eir ii7come ~or adult senior ho~~sing with little or no services. Based on an incoine allocation of 40%, a household with an in~~m~ of $225500 cotild afford a gross monthly rent c~f $750, roughly the beginnin~ gross rents in ne~v affordable adult rental developments. Thus, the tar~;et mar.ket for affordable adult rental 1~c~lzsin~ v~ill b~ s~~iors :~~ith i~~co~r~es c~f ab~ut ~22,5~~ ~p ±~ abc~~± ~35,2~?(~, ~uhich ;s rhe i,n- coine-linlit far one-persor~ ~~z~usin~ afford~ble ~~t 60% of inedian inc~me in the 1Vletro ~rea. Some lawer income-itlcome homec~wners will also income-qualify as will some higher incamc cottples (up to about $40,200}. The following are key points from Table 2: The 1VIar1<et Area's older adult households have substantially higher incomes than senior households who have reached ietirement age. The 2009 estimate shows that the median in- coine of hc~useholds ages 55 to 64 was $59,190, compared to $43,055 for households age 65 to 74, and $28,641 for households ages 75 and older. The higher incomes for younger senior households (65 to 74) compared to older seiliors (75 plus) are prunarily due to the fact that a higher proportion of younger seniors are lnarried and are more likely to have two pensions or higher Social Security benefits, while some continue to work. These incomes reveal that a higher proportion of older seizic~rs will income qualify for affordable senior housing than younger seniors. MAXF[ELD RESF,ARCH INC. Mr. Chris Little April 12, 2010 37t~' and Central LLC Page 5 TABLE 2 OLDER ADULT (55+) AND SENIOR INCOME DISTRIBUTION COLUMBIA HEIGHTS MARKET AREA 2009 & 2014 I ' ~ 55-64 ( ~ 65-74 - ~ ( ~ 75+ Tota165+ No. Pct. I ---- -- No.' Yct. I --_ lVO. Yct. No. ' Tct. Llnder ~15,000 31~ 7.3 365 10.7 684 21.5 1,049 15.9 $I5,000-$24,999 335 7.8 517 '15.2 ` 758 23.9 ' 1,275' 19.4 $25,000-$34,999 4l2 9.6 ~182 14.1 401 12.6 883 13.~1 $35,000-$~9,999 '714 ]6.7 635 1&.6 446 ']4.0 ' 1,0$1 16.4 $50,000-$74,999 1,001 23.4 634 18.6 384 12.1 1,018 15.5 $75,000-$99,~99 637 14.9 359 10;5 226 '7.1 585' 8:9 $100,000 or more 873 20.4 418 12.3 277 8.7 695 IO.G Total 4,2$G 100.0 ' 3,410 100.~ ' 3,176 100.0 '' 6,586' 100:0 Median Iocome ~59,190 ~43,055 $28,641 ' '$36,193 55-64 65-74 75+ 'Tota! 65+ No.` Pct. No.' Pct. No.' Pc#. I`~n. 'l'ef. Undcr $15,000 304 6.6 403 9.7 624 19.3 1,027 13.9 ~i S;Q~G~2~,~~9 3~6 ' 6.6 ' S42 :3.0 ~Q~ 2l.? ~ 3~» 't 6,r $25,000-$34,999 393 8.5 538 129 389 12.1 927 12.6 $35,000-$49,999 71( 15.5 '745 2'7.9 ' 450 13.9 ' 1,]45 16.2 $50,000-$74,999 1,074 23.2 81G 19.6 445 13.8 1,261 17.1 $75,000-$99,999 706 15.3 470 11.3 263' 8.1 733; >9.9 $100,000 or rnore 1,122 24.3 643 15.5 372 11.5 1,015 13.7 Total 4,621 100.0 '' 4,157 100.0 3,228` 100.0 ' 7,385'' I~0:0 ikledian Income $G3,768 $46,989 ~32,840 $41,~20 •• II' 1 55-64 65-74 75+ Tota165+ Na. ' Pct. No.' Pct. No.'' ' Pct. No.' `Pct. LJnder $15,000 -10 -3.2 38 10.4 -6f~ -8.8 -22 -2.1 $15,000-$24,999 -29 _8.7 25 4.8 -73 -9.6 -4$ '-3:~ $25,000-.`634,999 -19 -4.6 56 I Lfi -12 -3.0 44 5.0 $35,000-$49,999 < 2' 0.3 110 17.3 4' 09 ] 14 10.5 $50,000-$74,999 73 7.3 182 28.7 61 15.9 2d3 239 ~75,000-$99,999 69 10.8 ' 11 l` 30.9 37 16.4 l48'' 25.3 $100,000 or more 24) 28.5 225 53.8 95 34.3 320 46.0 Total 335 7.8 ' 747 21.9 52 1.6 799' 12.1 Median Income ~4,578 7.'7 ' $3,935 '' 9.1 $4,199 14.7 ;; $5,227 14:4 Sources: Applied Geographic Solutions; Maxfield Researeh Inc. MAXFI~LD RESEARCH INC. Mr. Chris Little April 12, 2010 37t" and Central LLC Page 6 'I'he target market for affordable senior rental housii~g is generally senior households age 65 and older. A sma11 portion of older adults, ages 55 to 64, may also choose age-restricted housing but overall, they usually aeeount for only a small portioil of the demand within any given market area. Overall, the greatest proportion of demand will come frc~m seniors ages 75 and over. In 2009, the number of age (65+) and income-qualified ($22,500 to $35,200) households totaled 1,216 households, or about 18% of age 65 plus households. • The ~~urnber of age a11d income-qualified households in 2~14 ($25,000 to $40,000 to account for il2flation and a17 increase in the Twin Cities Metro Area ineome liinits) is expected to in- crease to roughly 1,320 households ii12014, or an increase of 105 households from 2009 Homeownership Rate In addition to existing income sources, many senior hauseholds are able to derive additional in- come by invesYing the proeeeds from the sale of a home. ~I'his suppiemental income can be used to cover the eosts associated with residency in an age-restricted facility. I'able 3 shows home- ownership rates ~ron1 the 1990 and 2000 ~~nsus for se~7ior h~usehc~lds in tlze Market Area. (~verall, $0% of the Market Area's older adult and senior (age 55+) hoLisehc~lds owned their housing in 200Q. F-Ionleownership rates typically deeline as householders age, howcver 1Vlar- ket ti~•ea h~r~eo~vn~~•snip ~~a~~s ic,r sezii6rs increas~d ~~~~r $2% am~ng ~~us~l~ol~s a~e 55 ~:, 64, to 85% amang l~ousellolders ages 65 to '74, and then dcereascd significantly to 75% for households age 75 and older in 2000. The high homeawnership rate in tlle Market ~rea indicates a large percentage of seniors have equity in an cxisting home that they can allocate to senior housin~. Households a~e 75 and ~ver experi~nced an increase c~f 52 rerlter h€~ti~sehalds (a 7.5% in- erease} and an increase in the llomeownership rate from 71% to 75% frorn 1990 to 200f~. This indicates tl1~t there i~1ay 1~e a l~ck of senic~r rental hoL~sing options in the Market Area. As seniors age, they may no longer desire, or be able or willin~ to maintain their single- family homes. They may prefer to move to housing that offers them greater freedom from maintenance and/or offers snpport services. Seniors typically begin to consider moving into senior housing in their early 70s. MAXFIELD RESEARCH INC. Mr. Cl~ris Little April 12, 2010 37`h and Central LLC Page 7 TASLE 3 OLDER ADULT HOUSEHdLD TENURE COLUMBIA HEIGHTS MARKET AREA 1990 & 2000 Age of Householder ~ ~ ~ ~wn E2~r.< <Jes~r. Ii~nt ~::~n !Rent ~x~n !?~nt No. of Households 2,416 Sl8 2,307 ~ 415 2,184 743 ~ 4,491 1,158 Homeownership Rate 82% 85% 75% 80% ~ I~o. of I louseholds 3,073 502 2,775 524 1,704 641 4,479 1,215 HomeownErship Rate 86°/o 84% 71% 79°/o A~„ ~ a~ No.o1'I-louseholds 17 -657 -4(i& -109 480 52 12 -57 Pot Changc -27% 3% -20% -26% 22°/a 7% 0%~ -5% Sources: U.S. Census Bureau, Maxfield Research Inc. Home Values Maxfield Research gathered data ~r~ resale prices for all single-famiiy homes 15 years or older in the Market Area. Table 4 below presents home resale data for homes in the Market Area. This data is presen~ed for the years 2005 through March 2010 from the local Multiple Listing Service. This inforn~atian is useful because it is a good indicatc~r of the amatint of equity that seniors may ~?P ~~J~P tQ ~PP1V~ ~rf1221 ~~?~ ~a~P ~~t~El?" ~2~J?22?S P,11~ =~~~~JCa~~ ~~~N.r.`~.~'~S 3~~PTl?c~.11yP ~?n~.lSl~1~. ~ tis oi 1~i`arch ~(~1~, the avcrage valiie of nornes resoic~ in the ~vlarlcet~ ~irea was $133,3 i~, while the znedian sale price was $~32,500. It sh~uld b~ noted that znedian sale prices are generally a more accurate portrayal of home equity since average figures can be skewed by a few very high- or 1ow-pricecl homes. The, f~act that the Inediarz and average are sc> close i17di- cates that the housing stock is very uniform throughout the Market Area. • Home values have declined signiticantly in the Market Area since 2005 due to the sluggish housii~g market and econ~rny. Fr~m 2np~ to ?pn9, r~,~ ?~~,-ag~ and n~e~lian sale~ pricPs c1P- creased by -34% and -36%, respectively. This large reduction in values has caused lnany seniors to choose to reinain ii1 their home instead of i7~oving into indepei7dent senior housing options. • The average length of time a home remained on the market as of March 2010 is 92 days. The average sale tiine of roughly tliree months is si~nifcant and indica~es the i~narket is a buyers market and that seniors may have difticulty sellin~ there holne in a short time should they decide or i~eed to sell thcir homes. MAXFIELD RES~ARCH INC. Mr. Chris Little April 12, 2010 37t~' and Central LLC Page 8 TABLE 4 SINGLE-FAMILY HOME RESALES FOR HOMES 15+ YEARS OLD COLUMBIA HEIGHTS MARKET AREA 2005 throu h March 2010 Average Sale 1?rice I~istcibuti~n # of Market Tiine Median % Average % Year Resales (Days)^ Sale Price Change 5aie Yrice Cnange 2005 808 56 $202,000 -- $208,103 -- 2006 655 61 $202,000 0% $209,203 1% 2007 547 115 $189,000 -6% $193,679 -7% 2008 636 154 $154,000 -l9% $155,219 -20% 2009 841 120 $134,000 -13% $135,805 -13% 2010* 88 92 $132,500 -1% $133,374 -2% % Chan e 2005 -2009 -34.4% -35.9% * ~3ata throlagh March 31 st 2010. ^ Figures from 2007 - 2010 are CDOM (Cununulative Days on Market}. 20 65 and 2006 CDOM was not available. Sources: Regional Multiple Listing Service of Minnesata (MLS); Maxfield Research Inc. Because a large majority of sel~ior horneowners own their homes outri~ht, they have access to a sizeable fmancial resoiirce in the fonn of the equiiy they can realize from the sale of their homes. While fhe interest earned on investing these fiinds can help offset the morlthly eosts assoeiated with living in a senior housill~ facility, many seniors are also willing to be- ~in spendii~g-down assets in order to live in a facility that meets their needs. ~or example, a senior who owns their home outright ~for $132,500 would likely be able to derive $123,225 a~ter factaring iit marketing/real estate comrnissians ax~d moving eosts (7%). Shouid this eq- uity be invESted i~n an interest-bearing account with a four percellt retunz, it would prod~uce an income of $4,929 annuallv (or $410 per month}. Senior Housing De~ned Senior housing is a concept that generally refers to the integrated delivery of housing and ser- vices to seniors. As shown in Figlire 1, however, senior housing can include a wide range of product types across the service-delivery spectrum. These product types range from independent apartments and/or townhomes with virtually no services to highly specialized, service-intensive, assisted living Linits or l~ousing geared for people with deinentia-related illnesses (termed "mem- ory care"). In general, independent senior housing attracts people age 65 and over while assisted living typically attracts people age 80 and older who ileed assistance with activities of daily liv- ing (ADLs}. MAX~'IELD RESEARCH INC. Mr. C1~~is Little April 12, 2010 37`~' and Central LLC Page 9 The least service-intensive projects, also termed "active ac~a~It" or "ada~lt" projects, are similar to general occupancy housing projects in that they offer virtually no support services or health care, but are age-restricted (typically 55 or 62 aild over). Or~;anized activities, transportation pro- grams and corninon areas are typieal of these projects. However, due to the lack of serviees, adult projects typically do not command the rent premiums c~f more service-intensive senior housing. Can~l^egate%ptic~ncxl-s~r~vices projects, the next level up on the service~-delivery spectrum, offer residents soine suppart services such as meals and holisekeepin~, but tllese services are typically a-la-carte so tllat residents can choose whether or nat to pay for them. I~Iext on the service- delivery spectri.im are congre~ate/service-intensive projects, which inelude even mc~re personal- ized support serviees in the rent, aa~d attract a frailer senic~r po~ui~tic~r~ tl~an adult c~r optional- services projects. As the proposed project in Columbia Heights wi11 be adult senior housing, this preliminary demand study focuses on demand for adult senior housing. The most serviee-intensive product types, assisted living and ~nemory ca~°e, offer the highest level of services that are just short of a nursing home. Typically, services covered ii1 the fee for both of these product types include all meals, housekeeping, linen changes, personallaundry, 24- hour emergency response, and a wide range ot personal care and therapeutic services (either built into the fee or a-la-carte}. Sponsorship by a nursing home, hospital, faith-based organiza- tion or other health care entity is cormnon for assisted living and memory care projects (as well as for many congregate/service-intensive projects). MAXFIELD RESEARCH 1NC. Mr. Chris Little April 12, 2010 37r~' and Central LLC Page 10 Supply of Independent Senior Housing in the Market Area The Market Area contains three independent properties with a total of 270 senior units. Monroe Village in Minneapolis is the only adult property that also offers affordable linits (11 of the 51 units are affordable at 50% AMI). The other two properties are located in Columbia Heights - Boulevard is a congregate/optional-services building and Apache Villa~e is an older market rate adttlt building with modest rellts. Table 5 on the following page summarizes these Market Area properties along with coinparable properties located jlist outside the Market Area. The following are key highlights regarding the competitive supply. There are 59 vacant units in the three Market Area properties (22% vacancy rate). Boulevard and Apache Village both have very high vacancy rates. Only Mc~nroe Village is performing well (one vaeancy out of 51 units). Monroe ~illage is the newest bz~ilding in the Market Area by 20 years and is located on a stretch of Central Avenue that is very walkable to retail and services. liRanrae ~iila~e Moiiroe Village senior apartments were developed by V~lunteers of America in 2004. Located in Northeast Minneapolis at 1900 Central Avenue, Monroe Villa.ge is a four-story building tor s~riia~s ~~+ and has a total 51 uriiis. T1~~ u~liis ccl~sist ~i ninE ~~~~-~edr6c,r~z uriits, i 8 anE- bedroom plus den units, and 24 two-bedroonl units. Monroe Village currently has one vaeancy and the property has maintained a high occupancy rate since opening. Rents range from $727 to $80Q far one-bedroon7 units, $825 ta $925 for onc-bcdroam plus units, and $825 ta $925 for two-bedro~m units. There are 11 affordable one-bedraorn units (6 - 1 BR, 4- 1 BR/D, 1- 2BR} that rent at the lower end of the rent speetrum above. Mc~nroe Village has 32 Underground park- ii~g stalts tl~~t r~~t f~r `~4(J per m~ntl2. Boulevard Apartments Developed and managed by the Crest View Corporation, Boulevard Apartments was opened in 1984 and contains a total of 74 market rate units. Boulevard Apartments is located at 4458 Res- ervoir Boulevard NE in Columbia Neights. The four-story building is for seniors 62+ and con- sists of 46 one-bedroom tuzits that rent for $1,000 and 28 two-bedroom units that rent far $1,180. Boulevard Apartments is on a campus with a skilled nursin~ facility (Crest View Lutheran Home) and assisted living (Royce P1ace), thus meals and services are available. Becausc Boule- vard Apartments is market rate and is a congregate facility, it would only be partially competi- tive with a new affordable adult rental buildin~ since their prilnary target markets are different. The average age of residents at Boulevard Apartments is about 82, but according to the manager, through turnover the overall resident mix has recently been getting more independent. Cur- rently, only about 12 of the residents receive meals (27%). Boulevard Apartinents has 16 under- ground parking stalls that rent for $40. Currently there are 30 vacancies that management attrib- utes to the poor economy and housing market. MAXFIELD RESEARCH [NC. Q ~1 Q ~ Cy ~ N ~ e-+ a ~ ~ U a ~ ~~..+ ~ •~-~ ~-~r ~ N '[/~-+ ~ ~ U s~ M ~ ~ L' v N~ ~ .. '~~ ~ ~ ~ y + i.. ~ ~ ~ VJ Q ~ ~ i~ ~+` (~ CJ 3 ~' ~ `~ a 'c.' ~ b0 S.~ ~ ~ C CS n ~' C~ ~.. ~ O („) ~ ~C r ~ ~ ~ i„ , .... ~ ~ ~ ~' ~ c3 v~ ~ ~ O .~ ~ i ~ ~ .~ ~ sA R3 ~ ~. C ~ ~~ O ~ ~ C3' ~ ~ p N ~ '~ ^0 '~ ~ 'S7 ~ °' ~ o ~ b o ~ ~ ,n ~j o ~' :x ~. ~' 3 0 E ~ n Or ,= ~ ~ ~,~ ~ ~'' b9 ~ V 4`~„~, '~ ~,~,J„ ~C G. ' b ~' O c~i ~ ~~ ci O U aJ : ~ ~ ~ ~J cJ U ~ CC T! v~ ~ c. ~ X ~ ~ ~ v~ ~ ~ ~ ~ '~ v ~ o i ~ N C~ ;~ ~ ~ ~ o ~ 3 a~ w ~ ~ ti, ~ a o c~ - ~ ^ ou ~,:..~ ~ a~ a5' . ~ ~ ° ° 1/l {.. " ~ o ~ . ~ ~ a ~ G , 3 c~ ~ Q p ~ .y . '~~ ~ ~ ~ ~ -~ ~ z c ~ c ~ ~ ~ ~ ~ ° ' ~ ' ' "o ' d a~ . o ~ ¢ ' G . - • ? ~ u ` ~' ~' ~ c ~ ~ ~ ' a ~ ~ ~' ~ • a - o o ~ .~ ~ vr- b ,~, N , ~ ~ . ~ ~ '~ ~ Q~ ~ ..O bA ~ E bU ~ N " af 'ci L, ~ ~ t1 ^ c. O ~ ~ O ~ b0 .:G ~ C ~ U ,.Y ~ r, G ~° 3 ~ ~ ' `~ ~ ¢ C c~ ~ ^a p.. ~ ~ ~ '`^` , N ~ a~ ? w o~ , ~ • a a o °' ' '~ ~~ N. 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O O ~ ~,p ~ , J ~y ~ hi! d N cC r; L C O O ~ d G O p CO Q~ ~O p~ O O o0 O~ ~ Q N N (~J ~ ~ L "~ 4 i -fl ~ ~ Q ^ •C ~ ~ .n ~ r a~ ~ ~ y 4 ,o ~ Y 4=. ~ ~ C 'p ~ . c~ "b p ~ ¢ . ~ G~ y v•~ C ~ '~ '~" a~o O ;.. ' D O ~ w .O Y .r np ''~ C~ ~ ~ ~ '^T. .:. ~ ~ ~ G ~ ?. ~ Q <C 3 :y. y cXtl '~ cc ~ ~ Y ~.G ca .. " ~ c''?~ O CG L C: ro p p~ ~ O O ~ > '~ ~ a> 'O~+ ~ ,-, Ci ~'2 ~ C~ ~ ~ ~ x ~' ~'S.. y ~ L N ~ x 6~ ~ ~ ^ ~ x .C l N ~ "' d 1wr ~. . y a CC "' `.-~ ~ ~1+ ~ a~ Z ` ' ~ ',7 ~ ~ ~ ~ U p y, Q ~ r .. ' ^ ca ... 3 ~ O O ~ cL O ~ . , 4~~. . ., .'". ~ d ~ .C • + C , .. CC c`d 7 . ch ~ 0.~ ~ ` t-r' ~ W U ~ '^ CJ ~ ~+"r: O E"" r% ~ C~ ~i ~ d~ ~~ c~ C1 Z H Mr. Chris Little April 12, 2010 37th and Central LLC Page 12 Anache Villa~e Apache Village was a general-occupancy rental property that opened ill 1969. Over file years the resident population became alder and the property is now age-restricted (55+). It is managed by Midwest Management. Apache Village is located at 3839 Hart Avenue in Columbia Heights ad- iacent to the new Lighthouse senior development (assisted livin~ and nlelnory care housing). There are a total of 145 tlnits consisting of one- and two-bedroom units. Monthly rents for one- bedroom units range from $6$$ to $745 and rents for two-bedrooms range from $810 to $$75. Management identified 28 vacancies as of this study. Soine underground parking is available for $50 per month. Cominon features and amenities among the projects include air conditioning, a coinrnunity roonl, library, garden plots, terrace/patio, and beauty salon. All projects offer ~arage parking for $40 to $50 a manth. Monroe Village is th~ only development that ~h~s in-unit washer and dryers. Comqarable ~ro~erties near the Market Are~ Thr~e aclult r~nt~l_ properties near the Marlcet Area were surv~yed for comparis~n purposes, Two of the properties are located in St. Anthony and one in Fridley. Togett~er, they combine for 249 iulits and c~nly eight units are vacant fc~r a vacancy rate of 3.2%. The closest property to the subject Site is The Landings at Sil~~er Lake Village, uhich opened in 2006. The Landings at Silver Lake Village is an 89-unit building that includes 53 units afford- able at 50% AMI. The properry has performed very well since opening and there is only one vacant unif. The village of St. ~nthony has higher av~ra~e hame values and hatiisehold ineames than C~l~ambi~ F1~ight~, an~ t~e site f~r T~~ ~,a~~dings at Cil~~~r I~ake ~rillage is tl~e rPde~~elU~- ment of the Apache Mail which includes ~eneral-occupancy housing, a Walmart, several smaller retail stores, and an existing Cub ~'ooas. r~eing lacafed ii7 St. 1`~nthony in ~ mixed-use red~vcl- opment where seniars ean easily walk to retail and services is a marketing 2dvanta~e that ~as enablecl The Landings at Silver Lalce Village ta maintain its high oecupancy rate. Banfill Crossing in Fridley is a 110-unit property with 44 units affordable at 60% AMI. Cur- rently, there are five vacancies with all five being in market rate uilits. The vacancy rate is simi- lar to previous years but according to the manager, rents have not been increased since 2008 and ihe poon c~~using market has impacted leasing as some prospective residents have been unable to sell their home to move into the building. IVIAXFIELD RESEARCH INC. Mr. Chris Little April 12, 2010 37`h and Central LLC Page 13 Non-Competitive Subsidized Senior Housin~ In addition to the aftordable adult rental properties identified in Table 5 that would be coinpeti- tive with the proposed development, there are also senior housing properties with deep subsidies in the Market Area. These incliid~ the following properties: Columbia Village Columbia Heights 39 units HUD 202 Heights Manor Colwnbia Heights 85 units 5ection 8 Norwood Square Fridley 50 units HUD 202 Village Green Fridley 10'7 units Section 8 Parker Slcyview Minneapolis 333 units Public Housing Holland Highrise Minneapolis 181 units Public Housing These subsidized properties wauld not be competitive with the proposed development since they are income-restricted to very low income seniors who pay 30% of their adjusted gross income for m~nthly rent. The se~~iors in rhesP properties would not be able to aiiord contract rents at affardable senic~r housing. Thtiis, there is almost no market overlap between stibsidized and af fcrd~~bl~ prc~pPYties. Pending Senior I)evelopments We interviewed city planners in Cohunbia Heights, Fridley, and Minneapolis to identify any pending senior projects within the Market Area. As of Apri12010 there are na independent sen- ior housin~ develapments that are plam~ec~, pending, or under cc~ns~ruction witlzin the Market 1~rea. Preliminary Demand Estimates for Affordable adult Rental Housing Table 6 presents our demand ealculations for affordable adult rental housin~; (independent with- olrt services) in the Market Area in 2009 and 2014. Irzcome-Qunli~cntions: The market for affordable independent rental housing is comprised of older adult (age 55 to 64), yoiinger senior (age 65 to 74) and c~lder senior (age 75+) households who earn up to 60% of the Area Median Income. These households would be qualified for in- eome-restricted housing products, but still could afford con~ract monthly rents beginniilg at about $750 (an income $22,500 by allocating 40% toward housing). Based on information sup- plied by the Minnesota Housing Finance Agency, current income-limits for holising affordable at 60% AMI are $35,220 for a one-person household and $40,260 for a two-person household. Al- though the primary target market is singles, our demand calculations use $37,000 as the upper end of the income-qualitied range to account for some couples. MAXFI~LD RESEARCH INC. Mr. Chris Little April 12, 2010 3~t~' and Central LLC Pa~e 14 We also include homeowner households with incomes between $11,000 and $22,500, as these households would have additional equity that could be converted to monthly income following the sales of their single-family homes. The number of qualifying homeowner households is es- tiinated by applying the appropriate homeownership rate, as ideiltified in Table 3, to each age cohort. In 2009, we estimate there are 3,184 age, income and asset-qualified households that would support demand for affordable adult rental housing in the Market Area. Capture Rcrtes: Accounting for inarket overlap between the market rate and affordable inde- pendent housing, we estimate that the existing units in the Market Area have a capture rate of about 0.5%, 3.0%, and 4.5% of the income-qualified households in the three age groups, respec- tively. This compares to an average metrowide capture rates of 0.5%, 5.0%, and 9.0%, with some areas of the Twin Cities having miich higher capture rates and some out-lyin~ suburbs and portions of the central cities having much lower capture rates. We project that by 2014 the hausing market shauld be stabilized and improving and that the Market Area could acllieve a capture rate eomparable fo t17e Metra Area average. To account for the cLirrent poor housing znarket, ~3~e apply capture rates that are ~nly slightly l~igl~er than is ctii~-rently being achieved since many of the poteiltial residents of a new affc~rdable adult rental property may have difficulty sell- ing their h~me. Fc~r 20099 c~ntux~ r~tes are eznp~~y~d at ~.5% for households age SS to 64, 4.0% for households age 65 to '74 and 5.5% for households age 75 and older. Tl~is resuits in a demand potelltial for an esti~nated 115 affordable adult rental Units in 2009. By 2014, total demand potential is estimated to increase to 183 units because of an inereasing senior population caupled with an improved hc~using inarket that wi11 allow higher capture rates of adult rental 1lousing. ~'c~tr~l l2en~~ar7 s P~teratit~l i~z [~ccrk~'.~r~~r; ~n ac~clitic~r~ tc the c;~srta~~~ ~~n~,rate~ frc~n ~~ithin tl~e Market Area, a second portian of demand wauld come from outside the Market Area. ~Ve esti- mate tl~at seiliors currentiy resiciing outside the Market ~irea wiii generate 2~% of the demand for affardable a~dli~t rental hausiti~ - increasing total dernai~zd to rau~hly 155 tz~its. L~emazid firatn oLitside the Market Area includes of parellts of adult childrei~ living in the Market Area, indi- viduals w11o Iive just outside the 1Vlarket Area and 11ave an crrientatian to ~he area and former residents who desire to retun~ upon retirement. The existing supply of adult housing satisfies some of the total demand for afiordable adult rent?1 ho>>si~~g i~~ the Market A_rea. To c~1~~latP Pxcess ~Prnan~-r_l~e ~eman~ ~ey~nd thP s«pP~Y of existing units-we deduct the nu~mber of existin~ units from the total deinand potential. These existing units include the 11 affordable units at Monroe Village plus half of the marl<et i°ate units at Monroe Village (20 units), 25% of the market rate congregate units at Boulevard Apartments (19 units), and about half of the market rate imits at Apache Village (70 units). Af- ter reducing demand by these existing competitive units at market equilibrium (95% occupaney}, total excess demand potential remains for 40 units of affordable adult rental housing. With increased demand but a st~ble supply, excess demand is projected to increase to 130 Linits in the Market Area in 2014. MAXFIELD RESEARCH INC. Mr. Chris Little April 12, 2010 37`~' and Central LLG Page 15 TABLE 6 AFFORDABLE ADULT RENTAL HOUSING DEMAND COLLJMBIA HEIGHTS MARKET AREA 2009 & 2014 1 Age of Householder 1 A„e of Householder '~~~~.~~~~~~.. 55-64 65-74 75+ 75+ 55-64 65-74 # of Househo(ds w/ Incomes of $22,500 to $37,000 ' S89 693 648 730 888 601 plus Nouseholds w/ lncomes of $I 1,000 to $22,500' 336 486 753 358 6ll 791 (times ) Homeownership Rate x 82% 85% 75% x 82% $5% 75% (equals) Lotal Potential Market Base = 865 1,106 1,213 = 1,024 1,407 1,194 (times) Potential Capture Rate Z x 0.5% 4.0% 5.5% x 0.5 ;% 5.0% 9.0% (equals) Demand Potential = 4 44 67 = 5 70 107 ~ ~ Total Affordable Demand Potential = 115 = 183 (plus) Demand frc~m Outside Market Area (25%) + 38 + 61 (equals~ Total Demand Potentia[ = 154 = 244 (min~is) Existing and 1'encling Independent Units~ - 114 - 114 . ._ ~ n., o,. ~• ~• nn....~ E h.. (cyUass~ 7'~~a~ LGIIIA~~ . ~te~~~zn. .;. ,..a..~~~ ~...^a = 4~ = 13~J I (tim~s) ~eru~~~t oi ~eanai~ci Ca-iura~le ~n a~;t~ x 50% x 54°/a e u~ls Excess Detnand Ca turable on'a-Site - 2Q = 65; ' To accow~t for inflation, 2014 calculations define income-qualified households as all households with incomes between $25,000 and $42.000 plus homeowners with incot~les betwecn $12,500 and $25,OQ0. ~`I'1~~~; ~xisting supply ii~i the Market Area currently has a capture rate of 4.5%, 3.0% & 4.5%. `I'he metrowide capSure rate for affardable ~dult rental l~ousing is 0.5`%, 5.0%1~ 9.Q°lo. We project that the Maa~ket Area could reach ine metrowidc average by 20i4 wilen the hotising n~arket has improved. 3 Tncfi~GCies th~ 11 affordable units at Manroe Villag~e and tc~ aecoi~mt for market overlap, t/2 of~tt~e 40 market rate units at Monroe ~illa~e, ZS% of the market rat~ cangregate units at Bauievrlyd, and 1/2 of the market rate anifs at Apache V illa~ge (all at 95%f occupancy, or rnarket equilibriumj. Nc~ adc~itional units are planned through 2014. Source: Maxfield Research lne. Potential Demancl Cabturable at Site: No single Site can capture all of the excess demand in a ~arket Area. ~eniors in n~ed-'~as~d siinati~z~s ar~ lcss s~lective when securing h~usi~-~g than those in noli-need based situations. Being an affordable development, we estimate that the pro- posed development on the subject Site could capture half of the excess demand, or a greater pro- portion of total demand that if it were market rate. Based on the calculations in Table 6, we find excess demand capturable on the subject Site in Columbia Heights for 20 units in 2009 growing to 65 units in 2014 when the resale housing market has improved. MAXFIGLD RESEARCH INC. Mr. Chris Little April 12, 2010 37`~' and Central LLC Page 16 Preliminary Conclusions The initial market assessment of the age/income-qualified senior base and inventory of existing competitive units in the Market Area indicate that demand exists for affordable adult rental hous- ing. However, the current poor resale housing market is impacting the ability of potential resi- dents to make the move from their single-family homes into rental housing. Two of the three independent senior buildings in the Market Area currently have a 26% vacancy rate. The pro- posed development would only have partial market overlap with ~hese ~wo buildillgs, however. Other newer affordable adult rental buildings in the surrounding area that are comparable to the proposed development are performing better, indicating potential support for the proposed de- velopment despite the perforrnance of existing senior properties in Columbia Heights. Given the size of the age-/income-qualitied holisehold base in the Market Area, olir calculations indicate that there is sufficient demand to suppart a development c~n the subject Site with up to 55 to 60 affordable adult rental units by 2014. Currently, and until the 1lousing market improves, leasiilg this inany units would likely be challenging. Projecting that the housing market will be- gin to improve this year or next, demand would then be sufficient to support a building with a 2O12 opening. We recommend planning for a buildin~ with 55 to 60 units (or up to about 9Q% of the calculated d~emand iii 2014). Since the majority of demand for affordable housing is from singles (a higher pr~portioi~ o# couples would not income-qualify c~r woulc4 prefer to stay in their singie-family homes), we recommend a uliit mix of mostly one-bedroom units. In addition unit sizes should be modest to help keep rents affc~rdable. Our recomsmende~ ~r~it-mix, sizPs and reni.s ~'~r th~ propose~l d~~elopmenr with an incc~m~ li~nit af 60% of AMI are shown below. The maximum monthly rents achievabie will be capped by the i~i~~i~ing pYO~i'a~it's ~ulu~lir'iES. Recommended Affordable Adult Rental Builcting U~~it Sizes Monthly % of Units Unit Type (Sq. Ft.) Rent 65% 1 BR 675 - 725 $750 -$775 1p°./o ? BR/D~n 859 - 900 $82S - $850 Rent per (Sq. Ft.) $1.07 -$I.11 $0.94 - $0.97 25% 2BR 875 - 925 $875 - $90d $0.97 - $1.00 $5 - 6~ Ut11tS Note: All rents are quoted in 2010 dollars. Monthly rents should incl~ide wat~er, sewer, and trash. Source: Maxtield Researcl~ Inc. MAXFIELD RESEARCH INC. ~~~Mo o~ ~~_ ~,~ ~ a - ~ ~~ ~ O ~P C~ ' ' ~ ¢'~ 3~ ~ .~ e~~ >°*.v ~ ~ ~ ~ ~~`' ~ L t~} ~ ~ (C{ ~ ~ ~ ~ p^y ~ ~ ~ ~ . ~ ~ ~ • ~° QS ~ ~ ~ O O ~ M o in ar ~ ~ N O ~ ~ W "- t~ ~ O ~ ~ U ~ N ~ ~' u'> tn ~ ~. ~ c~ ~~. t~ ~ ~ ~ ~ ~ C ~ ~ ~ r ~~ U ~ ~ (~ C+ J ~ O j Cr ~ <C LI ~ u'3 ~B (4 cn in " ~ . ( J O U ~ ~ ~ Q ~ ~ _ ~ J ~ ~ ~ ~ - a ~ . - - ((S ~ N ~~ 4J CO ~~ O ~ ' i~ v ~ 'a I~ p ~ N ch ~ ~ C ~ (B ~ ~- O f~ O ~ ~ ` _<( `O'~ Vi(~ ~ ~ ~ ~ . ¢.: ~ o OS ~ ~ ~ ~ ~' Q ~ Ln ~ . . ~> ~ ~ ~ ~ ~ C N ~ C3 N ~ ' U ~ ~' ° L ~a ~ <: _ ° q ~ N Q C lL N ~ ~C LL ~ LL ~ tr ~ ~ Q~ (B O ~- ~ Q 6 ~ ~ ~ .O ~ - O R 'm^ ~ ~~`, U @~8 ~8 . ~ ~ ~ i -Q o' _C -~ ' +_~ °' .J ~ O ~ N c~ N `~ ~ cU ~ i ° O L ° ~, °; „ ~ ~ -o ~ ~ ~a~.~a~ ~ ~ m.a ~ ~.a Q ~ ~ ~ ~ ° ~ ._ cv ~ ~ 5- ° ~ c ~~cnc crsO ~s> ~ ° z Q^E~ ~ ~ ~ = ~~ ~ ~~o.~o ~ ~ ~.~~~~~ o ~~ ~o ~ ~~ ~~~ ~ ~ ~ o 0 o a o m~ ~ ~ ~~~m~ ~m~~~ m~ ~Q ~~~ Q ~ o as ~ c N ~ cs ~ .~ ct~ . ~ ~ ~ o ~ t~ css d r ~s ~ '~ a ~ ~ c cs ~€ ~ .~ ~ ~ ~ ~ ~.3 css c .~ X ~ ~~~ .~~ -;' 6L~€~s ~hd an~ ~a~wl ir~ rr€ ~a~ ~: ~.~ ~ ~ ~ ~ - ~ [ ~ _.. _ _ ~ ~~~ ~ ~~ k ~ t ~ ~ ~ ~~~t, ~ , . ~~ IJJ Z ~ ~ c ~ Q ~ ~ cr5 ~ Z N ~ C J } Q ~ ~ ~ ~ .~ ~ ~ ~ ~ ~8 ~ ~ ~ ~ ~ ~ ~9 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~S ~ ~ ~ ~ ~ ~ ~ ~ ~ .~ m~ ~~ ~ ~ ~ ~ .~ ~ ~ ~ ~ ~ .~ S9d ~ W ~ ~ ~ ~ .~ N ~ ~ ~ ~ B ~ O ~ ~ ~ z c~ ~, ~ _ ~ ~ > Q ~ ~ c ~ ~~ U ~o 0 ~ c~ COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDAj Meeting of: Apri127,2010 AGENDA SECTION: ORIGINATING EXECUTIVE N0:6 DEPARTMEN~T: EDA DIRECTOR APPROVAL ITEM: Mady's Appraisal BY: Scott Clark BY: DATE: April 22, 2010 BACKGROUND : At the March 23, 2010 ~DA Meetin~ staff presented a suminary of 1) preliininary cost estimates assaciated with the purchase of the Mady property and 2) A summary of related acquisitic~n issues includin~ relc~cation and leasehold interest concerns. A copy of the March 23, 2010 EDA letter is ~ttached for review c~f the aforementioned iten~s. After review of this info~rmation, the EDA authorizec~ staff to enter into aY1 agreement fo1• a formal appraisal of the pr~perty. Attache~l is the complete apprais~l which sh~ws a value ~f $1,02$,OOQ f~r the improved property and $925,000 for Iand-on1y; and if so needed, staff will walk through the appraisai. Note: Staff received the appraisa~ just prior to sending out the E~A Agenda, and as such, the document is noteci as draft. Staff will review ~rior to the meeting with the possik~le results of i31Ot~i'~l~~t~i~'i??i it~i `t~~~ ~g- fn~i ;~u~r;~~~-. Similar to the Maxch 23, 2010 action staff seeks direcfion from the ED~1 as to whether negotiations should proceed. If the EDA agrees the recominended inotian follows: ~E~`~14~:R~F1l~~F~ I4~~'l"T~-N: Motian: Move to autharize staff to proceed with negotiations for purchase of praperty located at 3919 Central Ave. owned by th~ Mady/F~ss Partnershzp (in~luding any EI~~ paramet~ers c~r coblditi~ns). Attachments: A raisal dated A ri) 24_ 2010 from Na ~r;ll A raisal and Consu(tin EDA ACTION: . , c~IfiimT'~~~r~t ~~rr~rt~~r~~~i ~r~~~ ~ ~~~~ v~e 3927 Central Avenue NE Columbia Heights, MN 55421 City of CoEumbia Fieights Attn: Scott Clark, Community Devefapment Direetar I~~r~tm 590 - 40t~ Street ~1E Columbia Heights, MN 55421 li ~ ~ Attn: Scott Clark, Community Development Director 590 - 40th Street N E r~~~ ~mb~? i-{A~~ht~, Mt~ ti542'! The property is iegally described herein. The appraisaf assur~es that the property meets all curre~t e~viror~r~ertal standards. l"he ap~raisal analysis an~ ca~elusi~ns are subj~ct tc certain limiting canditions and assumptions described herein: It is our opinion of the current as-is market value in fee simple interest as of ~taril ~ 5, 2Q°~ 0, is El6~,IA~ ~P!!~lL~?Lel 4~F R~l~F~CET ~/~L!!E (er~~rov~s~ prcper~y~~: ~"~,4~~,~~~ ~ FINAL t3PINION OF MARKET VALUE {land-only): ~92~,00 Our company has 11 emplayees, has been in business since 1968 and has sufficient knowl~dge, ~xp~ri~nce, cant~cts ~nd re~~urce~ to compef~nfly comp6ete ts~is as~i~nrners~. Th~ accompanying report contains data secured from my persanal investigation and from sources consicierea io i~e relia~ie; , however, carrecfiness is not guaranteed. i o ine besi of my kr~owl~dg~ ar~d b~li~f, the ~tat~rrroents contained in this report ~re true and carrect. ~Ieither my emplayment ta make this appraisal, nar the compensatian, is cantingent upan the value reported. This report has been`prepared ir~ conformity with the code of pr~fessianal ethi~s and standards of professional appraisal practice of the Appraisal Institute and appraisal standards set forth by Uniform Standards of Professional Appraisal Practice. Sincerely, William R. Waytas, SRA, CRP Certified Genera MN 4000813 Molly J. Lewis Certified General M N 20391975 .~~~6ea~gell.~~~ iii TAB~E OF CONTENTS ~e~aer~l ~~~~~r~aa~i€~ra ~~g~ Summary of Important Facts and Conclusions 1 Introduction, Value Type, Condition & Stability of Property 2 Intended Use of Report, Dates of the Appraisal 2 S~cpe of the Apprai~a! 3 Property Rights Appraised, Personal Property 4 Identification, Real Estate Taxes 5 Subject Sales/Building History 6 ~s~r~p~i~re ~ata Regional Data 7 Regional Map 10 City & Neighborhood Description 11 Neighborhood Map 12 Market Overview 13 Site Description 14 Zoning Description & Map 15 Flood Map 16 Piat Map 17 DESCr~~ti~~ ~ af tye ~r~p~ c~e~ ~~e~ts ~ S Building Sketch 20 Aerial Photographs 21 Subject Photagraphs 22 ~~~~~~s~r~ Highest and ~e~t Use 33 Cost Approach 35 Sales Gomparison Approach 36 Income Appraach 49 Reconciliation 50 Type & Definition of Market Value, Environmental & Building Conditions 51 Certifcatian 52 Extraordinary Assumptions & Hypothetical Conditions 53 Assumptions and ~imiting Conditions 53 Qualifications 56 Addenda 59 SUMMARY OF IMPt3RTANT FACTS AND CONCLUSIONS ~ General Description: Mufti-Tenant Commercial Building ~ Appraisal Report. Sumrnarv Report C~rrga~t ~:~~: R€#a~! Stor~~ ~ Qc;noli~y ~Il~y Special Assumptions ! Conditions: Yes, see rear of report for details Site Size: 102,802 SF ~ ~~66~ir~g ~i~~. 2~,236 SF vaa~ R~~lt: ' 1 a5? Quality/Condition: Average / Fair Zor~io~g: CBD, Central Business District Highest and Best Use: Current interim use until redevelopment Property Rights Appraised: Fee Simple Interest Personal ~roperty: No business ar personal property incfuded Improved Site Land Only Cost Approach: Not Applicable Not Applicable Sales Comparison Appraach: $1,028,000 $925,000 Income Approach: Not Applicable Not Applicable I~i~~[ C3~~~[0~ e~~ ~~rke~ ~/~6~~: I $~,~2~,~~0 $92~,Qt90 I Nagell Appraisal & Cansu(ting ~ 952-544-8966 ~ wv/w.callnagell.com 1 INTRODUCTION This appraisal report reflects the data found and the opinions concluded from an appraisal of a multi-tenant comrnercial building located at 3927 Central Avenue NE, Columbia Heights, MN. The property has two retail stares on the main level while the basement is used as a bowling a~{ey. Th~ p~ c,:~erty ras ave~ ay~ ~,uality/a,.~,~~ao a~~ is ~~ ~ fa~r c~nciiticr. T~e ~u~ ~~nt use ;~ considered an interim use until redevelopment takes place. City reports that the building and site improvements were built over a former municipal dump and in order to redevelop the site, soil corrections will likely be required. However, per client request, this appraisal report assumes no contamination or site issues. VAL.UE TYPE, CaNDITICIN & STABILITY OF f~RC1PERTY Type of ii~iue: ' This report pravides an opinion of mar~et vaiue. Condition af Value: This report provides an opinion of the as-is value. I~Jccu~ancg~ ~f ~he ~roperty: I The subject is 100% occupied. INTENDED USE OF REPC}RT ~"h~ v,i~~t ;~t~r~~~ ~~ ~~~ ~h~ a;~Nra;~a! fvr ,ne~ot;a~ir,g a Ncss;~le s~tQs ~ransa^t;~r,. ~"l~i~ appraisal assignrnent was requested by the narr-ed client/owner fc~r its ~~~~ ~€~~. Nc~ party, ather than the clienf, may use ar rely upan any part of this report without the prior written authorization of both the named client and the appraiser. This report is not valid unless it contains the originaP signatures in bl~~ ir~k. Any unauthorized third party relying upan any portion of this report does so at its own risk. DATE OF THE APPRAISAL The effective dates are: • The effective date and inspection date is pr~i 15, 2~1 a. • The date of the report is April 15 - April 23, 2010. 2 Nagefd Appraisal & Consulting ! 952-544-8966 ! www.callnagekl.com SCOPE t~F THE APPRAISAL REPORT USPAP defines Scope of Work as: The type and extent of research and analyses in an assignment. For each appraisal, appraisal review and appraisal consulting assignment, an appraiser must: 1) ldentify the problem to be solved, 2) Determine and perform the scope of work necessary to develop credible assignment resuits and 3) bisc/ose the scope of work in the report. 1) Provide a reliable opinion of market value as it relates to the intended use. Per assignment request (see addenda for engagement letter), the following degree of 2~ ' research and analysis has been made. The narrative format used is a~~r~€~~ry ~~~c~r~, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(b} of USPAP. See individual approaches for further detail. ' `~he ~~~a~e e~f ~rs~rk ~`~r th~~ ~s~tsr~~~~~ ~~a~€~~#e~: • a} Prcped y ic~er~tificativn: Pubtic record, plat maps, zoning maps and aerial photcgrap~s were used to identify the subject praperty. • b) F~ro,~erty 1lievving.LL Viewing of the subject property, proposed pians/speciTicaiions ~iT anyj and neighqornaod oy Yne ~pp~~i~er. rrysr'c~1 id~ic~is: ~ ~a~~d on ~r~p~rty viewing and conversations with the client; citv and county officials. Lot size is based on county information. Economic Factors: Consisted of gathering of information from market experts, city and/or county offices, and internet about the regian, community, neighborhood, zoning, utilities, and any pending prajects in the area that may affect the subject property. ° _ ~~ ~xt~r~ v~ ~a~a ~~s~a~c,'~~~: ~ales aata oz compezsng pr~perti~~ within the ~~' i subject rnarket area were given primary consideration. The most r~levant data is used in this repart. Saurces inciude, appraiser data fiies, assessar, iniernet, developers, agents, ~l6L~, periadicals, in-offiee library, etc. In addition, durir~g the course of appraisal practice and of this appraisal process, the appraiser has had angc~ing discussions with market participants (buyers, sellers, praperty managers, real estate agents/brokers, etc.) and/or viewed market data in relation to how the current real estate market may impact the subject value. The appraiser has not researched the title or ownership records. • d) Type and Extent af Analysis AppEied at Opinions or Conclusions: An extensive review of market data was performed. The most recent, similar and proximate data has been used. The data used wilf be adjusted an a grid. Appropriate collection, verification, analysis and viewing has been performed in the vafuation approaches, given the purpose and intended use of the report. A final value opinion will be discussed and correlated. The appraiser accepts full professional responsibility for all of the analyses and conclusions ' contained within this report. The data used was 'abtained fram saurces considered credible, yet its accuracy is not guaranteed. NageEl Appraisal & Co~sulting ~ 952-544-&966 ! wwv~r.callnagell.com PROPERTY RIGHTS APPRAISED Real property ownership consists of a group of distinct rights. There are two primary property rights, Fee Simple and Leased Fee (as defined by The Appraisal of Real Estate, 13'h Edition, Appraisal institute}. ~c^~ ~vei~i~'ae~ ~gie~6~~~: R~so~~t~ ovyners"i~ ur~encumber2L~+ k'ijf a^iiy ~tilEi iiiiEiESt Gi @Siat@~ subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. Note: This would typically reflect an owner-occupied property. When the property rights appraised are the unencumbered fee simple interest of the real estate, the appraised value is subject to normal easements for drainage, public streets and utilities, if any. The effect of any existing mortgage or delinquent taxes an the subject property has not been considered in this appraisal. ~~~~~~ F~~ ~~~~~~~~= The awnersrip inter~st held by a lessor (landlord), which includes th~ right to the contract rent specified in the lease plus reversionary right when the lease expires. The lessor's interest in a property is considerQd a leasec! fee i-~terest regardless ~f the duration of the lease, specified rent, the parties to the lease, or any of the terms in the lease contract. Fi i~aseu ~~c~~i~ity, ~ver ~~i~ vvith i~~~t t~at i5 cu~i~isfie~~4 witi~ ~rark~i r~~rit, is a~praiSeCf ~5 ~ leased fee interest, nat as a fee simple interest. Even if the rent of the lease terms are not consistent with market terms, the iease fee interest must be given special consideration and is appraised as a leased fee i~terest (The Appraisal of Real Estate, 13th Editian, Page 114}. The subject is partial(y (50%) tenant-accupied. Hawever, given the nature of the subject properiy, on6y the iee simp6e inieresi wiii ae cansiaered. PERSONAL PROPERTY Appraised value ref(ects real estate only. The appraised value given in this report does not include business value, FF&E or personal property. Specifically, bowling alley equipment, business value and/or liquor license not included in appraised value. ,4 Nagell Appraisal & Cansulting ( 952-544-8966 ~ www.callnagell.com IDENTIFICATION Street Address: 3927 Central Avenue NE Columbia Heights, MN 55421 ' THAT PART OF BLK 4 WA~TONS REAR OF ~OTS 33 & 34 BLK 6 RESERVOIR HILLS LYG S l.egal Description: ~~ N 330 ~T THEI~~O~; EX S 100 F~" C~~ W 183 FTOFSDBLK4(ASMERSALGW&S~INES THEREOF}; SUBJ TO EASE OF REC, ANOKA COUNTY, MINNESTOA. The County PID #: 36-30-24-33-0148 The Fee Owner: Mady-Foss Partnership Census Tract #: 515.01 REAL ESTATE TAXES 2010 Tax payabie: $29,883.00 Specia! assessments, fees, etc: $1,721.71 Tota! special assessments, fees, etc: $1,721.71 Assessor's Value 2010 (payable 2011 } ' Land: $687,100 Building: 75,500 TotaL• $762,600 Comments: The 2010 tax ratio for the subject property (based on 2009 assessed value) is approximately 3.56%. Real estate taxes generally range from 2.75% to 3.50°1o for retail, office, industrial, hotel and other commercial uses and from 1.0% to 1.25% for apartment and residential properties. The current tax ratio for the subject property is slightly above the typical range. Appraised value assumes any and all special assessments paid in full and that there are no delinquent taxes due. Nage€! Appraisal & Cansulting ( 952-544-8966 ( www.callnagell.cam SUBJECT BUILDING, SALES & LEASE HISTORY Building History History: The building was constructed in 1957. The main level is used for retail while the basement is used as a bowling alley. Sales History Sales Comments: No known or reported sales of the subject within the last three years. Current Listing: None known ar reported. Lease Data ~~rr~~t Le~~~~ YP~, SPP In~~mP A~~rn~r_.h f~r c~~t~ils. o~~~~~~~y ~¢ tn~ ~~G~~~y: ` ~ rc 5~~;~~t ~~ ~ c~~;o ~c~~,~~ea. Given the condition and use of the building, the current rents appear in line with the market. Therefore, the subject has Leasehotd interest: neither a positive leasehold interest (market rent higher than contract r~nt) c~r n~g~tiv~ l~~~ehc~l~ inter~~t (mark~t rent lower than contract rent}. The lease cantract is not in favor of ~re t~~~r~t ~r th~ lar~d~cr~. Given the nature of the subject property (fair conditian, high land-to-building ratio, focatian of site in relation ta Central Ave), the current commercial use is cansidered an interim use until redevelopment takes place. As such, most buyers Comments: would not purchase the property for long-term investment purposes as-is and would give little consideration to the existing lease contracts. Therefore, the existing [ease contracts are estimated to have little attributable value to the subject property. Association Dues bues: None 6 NageEl Appraisal & Consulting ~ 952-544-8966 ~ www.callnagelLcom REGIaNAL DATA ~tr~ ~r~~: Minneapolis, St. Paul and the surrounding cornmunities are known as the Twin Cities Metropolitan area. Slightly over half of Minnesota's residents live within this area. In both of the fuily developed centrai cities--Minneapolis and St. Paui--the population has deciined due to smaller househoid sizes, yet growth in other areas of their counties has been more than offsetting. Below is detailed where this growth has occurred: County 1990 Census 2000 Census 2008 Est. Census % of Total `00 '08 Est. Change - Median Income* ~r~~k~ 243,641 2~~gf}~4 327,~90 10~~% 9e7°f~ ~67,275 '~ Carver 47,915 70,205 90,043 3.0% 28.3% $78,035 Dakota 275,227 355,904 392,755 13.0% 10.4% $72,393 Hennepin 1,032,431 1,116,200 1,140,988 37.8% 2.2% $60,115 Ramsey 485,765 511,035 501,428 16.6°/a (1.9°/a} $51,862 SCatt 57,846 $9,498 128,937 4.3% 44.1% $80,968 Sherburne 41,945 64,417 87,660 2.9% 36.1 % $67,428 dl'Jas~S@~~tc5e~ 145,896 201,130 229,173 7.6% ~3.9% $78,067 Wright 68,710 89,986 119,701 4.0% 33.0% $65,419 Tt~tal 2 39~,376 ' 2 796,459 -'__ 3,017,775 90t3.0% 7.9% $6J,062 'Mediaro ir~comes reported on thi~ page are the 20Q5-2007 Arr~erican Cammunity Survey 3-Year Estimates as reporiec! by the U5 Census Bureau. ~~bj~~~ ~c~~r~t}~: The subject is located in Anoka Caunty, which had an estimated population increase of 9.7% between 2000 and 2008. . The subject is located in fihe southern portion of t4~~ cQ~~iy ~~ the r6is~ ~` r~l~rr~=ia H~E~ht~. ~~B3~i~8~~l~ ~3ct~~: 1~C I Wli~l t,~+il~llGS IS t~l~ i 3t" i~~g~si fr~~eicei i~i ~~~ruia~i~iri ~ri~i t~i~ I f th Irl f~~c'lll sales in the nation. Bn 1999, fihe median household incame for the 9-Ga~nty Twin Cities Metro Area was $58,449. The current residentia( interest rates, far a typical 30 year mortgage, are around 5% to 7°l0. Commercial rates are around 6.0% to 7.5%. Rates are expected to be relatively stable over the next year. Twin Cifiies Metro ~ ,rea - i~esid~ntiai Mar ~efi Year # of Sales Avg. Sales Price Annual % Change 2005 57,283 $272,522 6.3°l0 2006 47, 906 $278,462 2.2% 2007 40,049 $274,733 ~1.3°J~~ 2008 38,746 $236,945 ~`i3.~~f~ 2009 45,200 $199,404 ~15n~°fo~ Nagell Appraisal & Consulfing ~ 552-544-8966 ( www.callnagell.com 7 Regional Data - continued The current state of the macro economy is poor to stabilizing. The housing market in most regions is down 5% to 30%+ over the past 2 years, with foreclosures at historic highs. The commercial real estate market has been somewhat rnore stabie, but has experienced a gradual softening as the impact of the residential housing market spreads throughout the economy. The major stock markets in the United States and around the globe have experienced double digit declines of 20% to 40% over the past 2 years +/-. Action is currently b~ing taken bv th~ ~l~ ~overnment and Qth~r gl4b~l ~utf~~rities t~ mitigat~ the crisi~ and stabilize national and world economies. 1'r~~d~: Users of commercial, industrial, office and residential are down-sizing. In addition, tenants are opting for shorter leases while landlords are offering more build-outs and/or cancessions far longer term leases. Nationally, the average size of a single-family hame in 2009 was 2,215 SF, while the average 2008 size was 2,277 SF. Taday's average hame size is roughly double what it was in 1960. ~~nual Ur~~mplc-~ ~r~t ~€fi+~~ ~l~~i€~nal s ~.2 ~ ~ ~.? i S.~ ~ ~ ~ ~ c ; ~.2 1 ~.~ 1 ~.E ~ ~.8 ! ~.~ ---------- - -- - -- ~ ~ .____ . ..-; _ __ _- ' ' ' -~--~- r --~----- ~-----~- P~tl~ ~ z ~~° a ~~f j 3.8 ~ 4.5 ~ ~.9 ~ 4.~ ; ~.Z ~ ~.2 ~ ~ 4.Er ~ 5.4~ ~ $.C~ Histarically, significant changes in unemployment can be an indicator of changes in real estate vacancy and/or values. ~aab~~~t ~~~~: The median income as of 1999 was $40,562. The populatian in 2008 was 18,210, down slightly from 18,520 in 2000-a 2% decrease. Based on the data below, it appears that list prices and sale prices are out of line. Year # of Sales ' Avg. Sales Price ` Annual % Change 2005 337 $194,545 5.3°l0 2006 242 $189,044 (2.~~fo~ 2007 209 $185,376 ~1,9°l~~ 2008 285 $142,648 (23.~ °/a~ 2009 328 $123,615 (~3.3°l0} Listings 141 $153,458 N/A $ ~tagelE Appraisa! & Cansulting I 952-544-8966 ~ www.callnagelLcom Regional Data - continued ~~`e'c~~~~`~1J~11~ ~1~II~S ~E~~C~} /~!'~c~ ~c~~'~{~$ ~/€~Cc~C~C~/ u _ .~ - -- zs _~_. ___ _._ . ___ _ ___~_ .__.~.~_ _. ---...~__ _..._ _ ___ ___. ____._.__ --_ _ _ . -- :e I . _ _ _ ~ ~€~ ~ , ______ u ~ > ~~ ~ ~ ~ ~ ~ t~ - - - -- ~ ~ ~ ~ ~~ ~ ~ ~, ~ ~ ~ ~~ ~ ___.._ ~ ~~ - - ~~~ ~ - ~ __ -~___ o -- ~ ~ ~ ~ ~~~2 ~ ~ ~t~o~ ~ z~~~ ; ~~~~ j ~~as ; z~c~~ ~ ~o~~ t z~os j 2a~~ j ~~ ,_. _ ~ a ~ ~___~ ____ ~ _________ €~f~~ce ~~~ ~ ~ 12.7 ~ ~ 27 ~ ; ~ _ ~ .__ _ I 1s 9 ~ ~ _____ 18.3 ___~ _ ~.._ ~ ~6 i j 15 ~ ~ 1s 2 ~ ~ __ ~ ~.5.3 ~ ____.._ ~ i - ~9.6 ~.__ _ _._ ~~ ~ _ _ .-- ---~- -- _. _ __ ~r~€~us~r~~l ~ ~~~ 23.3 ~ ~ 24 i _ .__ 25~Z ~ : ~ _ ___ 15.5 __...~ _____ 13 ~ 13 ~ 2I 3 ~ ; ~ i 12.3 ~ C 15.8 ' , _ P a_,~. FbEfiall ~~ ~`t_F'~s ~ ~ ~.~ ~~ ._ _.__~ _ _ ~ ~ 5 ` , ____~ ?~c~ _,_ ~ G.3 i-_ ~.7~____ -6 ~ , ~ _ ~ 7.e'3 E t _ __ _ I~. t ~ ~ ~~ F~partrriertts j i f.6 [ 7 6 ~7.3 ; 5.1 ; ~#.7 ; 4 Z i 4.1 I 6.4 ~~~~'~E~~~`1~ ~1'~I~Sr i~`'~~"1~ ~1"!~t'"~ ~2~~ ~+~'~~~ ~ - 1~ ~ € } ~ - - -- _____ ~ - ~ It --- ~ ~~, ~ ~ ~ ~ [ ~~~~ s,~ _ ~~~ ~ ~ ~ g ~~ - ~. '~ ~ - - µ ~ - -- ~ ~ ~ € ~.~,,~ ~,,, .~ ~~~ ~ ~ ~_~ ~ ~ - «: ~ ~ ~ ~ 4 ~ ~ --_ _ ' _ _ _ ~ ~ ( '`"' l~._ 2 ; ~ - - -- - _ €} ~- ~ 2tDt?3 i 2E?C~4 , - - - - ~ ,2E1(35 ~ 2C}06 ~ ~t3C~7 ~- 2tJ~C~& i 1 20C}9 O ffice ~ 1f~.4 ___ __~~___ ~ 9 ___ .__ ~ ~ 8 ~ 7.3 ~ 7.1_ L ~ .~ 7.6 £ __ ______ ~_ 7.5 , __-; F ~ ~tl(~CfSEC"E3~ .. ~ ~ ~ _ ~ ~:.~.~ _ _ _._ _ ___ ; ~.~ _ _ _ ..__._ __--tt ---- ~ ~ ~ ~ ` ~ ~ 7.E`~t ~ .. ~ {~?.~ . . ~ . ~ ~ ~~ ~. ~. . ~ ~~~.~/" . ~ ~ . _.- ..:____._..._..___ _~. ~ ..~,~,..x~,.~~,~ ~L~36~ . ~. ~..~ ~~_.,_. ,__....._~... j . ~~. ~.~ ..~ m..~. __~_ . _ . ._... ._.,_~_.m..__ ~ ~ 7 ~ ~ ~ ! ~ ~. ~ FJ ~~ ~ _ ____~ ~. ~ ~ ....... ~ _..~ .. 7 ~3 ~_ ~_ -.- ~ ~ -3-~_~_ .~' ".._.___. .~__..J.~_...__.__,_ .,_.~.~__.__._..._ _ } _.. '}._ _._.__'~"~ ~ ~~"1c'~C~E11~fSt$ ~ . ~s.~3 ~ . .~. ~. ~.~ . ~j ~ 7.rJ ~ j .~~-3 : . ~ rJ.cJ' .. i ... ~l.r'J ( .. {-'7.~ , Source: NORTHMARQ (as of June 2009) Comments: Increasing vacancy and capitalization rates indicate softening/declining values. Nagel! Appraisal & Consu{ting ( 952-544-8966 ~ www.ca(Inagell.com 9 REGIONAL MAP ~ ~ Nagell Appraisa! & Consulting ~ 952-544-8966' www.callnageli.com CITY & NEIGHBORHOOD DESCRIPTION Type of neighborhood: Suburban Percent built-up: 97% developed Stage'of Development: ' Stable with Redevelopment Subject Neighborhood: City limits Major Transportation: University Avenue & Central Avenue ' Single Family Residential 75% ' Two- & Multi-Family 11 % e n it Commercial/Industrial 11 % & ca farm y: Predominant typ ' Other/Vacant Land 3% Total: 1 QO % Average conformity. Reputation of the area: Average ,Typical property age: New to 75 + years, predominant 4~0+ years Single-Family Home Sales $75,000 to $200,000+ Apartment Sales: $35,000 to $75,000+ per Unit c~~~~~ P~~~e~t~ ~~~~~e $~~.oa to ~~~o.ao+ ~~~ s~ Retail Pro~erty Sales: $75.00 to $150.00 + per SF Ir~dustrial Pro~~rky ~al€:~: $35.00 ta $~5.Q0+ per SF Capitalization Rates: 8°/a to 12% Historic Vacancy Rates: 5% to 15%+ Historic Neighborhood Trend: ' Gradual increase in values over time. Detrimentai influences: No major app~rent Comments: The subject is located about 15 minutes north of Downtown Minneapolis. The Central Avenue corridor supports a wide variety of commercial and multi-family residential uses. Due to the built-up nature of the area, redevelopment is on-going. Columbia Heights has a reputation as a stable community. Columbia Heights as convenient access to downtown and surrounding communities. There are no apparent adverse influences. Property values are likely to remain stable with a gradual increase over time. Nagsll Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 11 MARKET OVERVIEW ~°~~~~ 51 st Court & ~~~~ Central Ave, 93,218 SF June 2009 $689,000 $7.39 1 ~ ~~ . ~ ~ ~~~ Columbia Hts mments: Finished commercial lots located just east of Central Avenue. Building Sales $40.00 to $100.00 + per SF N~t Buiidir~g Rer~ts: ~6.00 to $10.00-~- per S~ net Typical Unit Size: 500 to 5,000 SF +/- ~ Construction Costs/TI's: ~$50.00 to $75.00+ per SF /$0.00 to $15.00+ per SF ~ Rent concessions typically include 1 to 3 months free rent ar the cash equivalent towards tenant build-outs. Due to the Rent Cancessions: soft market, lease contract lengths are somewhat shorter than previous years and generally range frarn month-to- ~ ~or~th t~ 3 y~~r~ +/-, ~ Active Listir~gs: ~ OversupplY ( ~ales e4ctiv6#y: ' Soft Comments: In viewing the neighbarhoad and considering recent publications, news articles and comments from rrtarket participants, it is concluded that the averall residential market in the subject area is declining. Due to the soft overall market, residential and commercial development has slowed significantly in the past 2 years +/-. New construction labor costs have softened, however, material costs appear to be rising. Overall, construction costs are very competitive to what they were 1 to 2 years ago. Generally, when vacancy is over 10%, new construction is slow. Retail vacancy and cap rates are on the rise. The above properties represent a sampling of current listings. Listing prices have been declining from a period of high seller expectations that peaked around the same time as the residential housing market. Sefler expectations and value appear to be trending towards equilibrium. However, there are still numerous properties with list prices that are above market norms, resulting in lengthy marketing times. Appropriately priced properties continue to reflect marketing times similar ta historic norms (under 1 year typical). ~re~~1~ ~rk~$ `~r~~d~: Declining Nagell Rppraisal & Consulting ~ 952-544-8966 ~ www.callnage!l.com 13 SITE DESCRIPTION Dimensions: Irregular, see plat Site Area: ` 102,802 SF (2.36 acres}, per Plat Systems Topography/Shape/Low: ~evel to sloping (SE corner) / Rectangular / None Noted Soil conditions/Drainage: Assumed to be Stable / Appears Average Citiiities: ElectricitylGas Yes I Yes Water/Sanitary Sewer Public / Public (?ff-Site Improvements: Street/Curb/Gutter: ' Bituminous / Concrete Sidewalk/Alley/St. Lights: ' Concrete / None / Standard ' Storm Sewer: Storm Drainage Access/Number: Central Avenue / 2 Frontage; Central Avenue and 39th Avenue NE i/isibitity/Exposure: ' ~verage ro Good Flood hazard zone: Appears no, Zone X, 27001000058, 09/29/1978 Apparent Easements: Typical Utility & Drainage Encroachments: ' None Apparent Unusual Conditions: None Apparent (former municipal dump) Use: ' ' Commercial Building ~uilc#ir~~ ~Locati~r~: CJa~theas~ p~rtion of site L~~~ t~ E~~~I~In~ ~~t~~= ?.20 t~ 1.Q~ (basP~ ~n rn~ir? le~~l G~A r~nlvl Surplus/Excess Land: Yes-the site is somewhat under irnproved. However, given th~ ~9~ of the existing improvements, splitting the site is nat cansider~d feasible. The current commerciaE use ~ontil demand warrants redevelopment appears most logical. Functional Adequacy: ' Average N: Vacant Commercial Lot S: Commercial Surrounding lJses: E: Multi-Family Residential W: Commercial Distance to Major Road: The subject is located approximately 2 miles east of I-94, 2 miles south of I-694 and 2 miles west of I-35W. Comments: The subject is located along Central Avenue, which is a primary commercial corridor connecting directly to Downtown Minneapolis. Most buildings in the area are older and of fair to average quality. Due ta the built-up nature of the area, redevelopment is on-going. Traffic an Central Avenue is above average. Na apparent unusual conditions, adverse easements or encroachments are noted. The subject conforms to surraundings. 14 NagelE Appraisal & CansuEting ( 952-544-3966 ~ www.callnegell.com ZONING DESCRIPTION The subject is zoned CBD, Central Business District. The subject appears to be a legal and conforming use. Per City Code, "The purpose of the CBD, Central Busrness District, is to provide for the development and redevelopment of the established downtown core, including a mix of retail, fir-anciaf, ofi~ice, s~rvice ~na' ~nte~tai~rri~nt uses. Residentiaf ur~its are alic~we~ 'vlflii`Tfi~ this district when located above a first floorcammercial use." Cen#ral Business District Primary Permitted Uses: Multi-family residential (above 1 St floor commercial), 9overnment, park/playground, recreational, school, place of assembly, bowling allev, clinic, daycare, financial institution, restaurant, hatel/motel, affice, retail, service, theater, etc. Conditianal Uses: Auto repair, parking ramp, outdoor storage/sales/display Parking Requirements: Off-street parking not required Minimurn 5ite Size: None M~n;~„~o„ Lc~~ w~c~~h_ 2n° I~I~a~ A~~a R~t~~: I c~.v Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 15 FLOOD MAP ~~~~~~~~}Q~ ~ ~rrasa~ 4MNftN.tYf~Ff{t30tI,CYtET1 ~ f-~TOG~'2'~~^~fG~~ Prepared fe~r: PJagelC Appraisal ~ Consulting ~~"~~' ~Btit'i31 A'VB ~~~ Calurnbia Heights, tvlh! 5~21-3932 } ~,c~ ~~ ~~ ~ ~ .~ .f ~ a~ so~° ~~~° ~ ~~~~ ~ ~~~~ , ~~.~.~~~~ , ~~~.f~~.~~ I~#'§~~S-2x'.~?8 5aazr~€ase as:,i`a€ F~r:Sc>vr~: ~s*F+~at~ms. F.~ i~}§stv res~ve€~, r'a[~is :%,c~32.3Z~ es?d 8:?~7~.~75. ~3tF~z ~iat~.nis peaaFsr~. 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'~`tt". ~ . ~. .~ ~ ' ~ f Y^~ ~ 3~ x '^~ ~ ~'i %2€ ~ ~ ~ ~ ~ ~ g #~+$ g ~.,. ~~ ~i'~~" ~~ ~ ~ ~ t* . # ~ ~y9~ ~ ~ ~- ~ ~ ~ g §: ~ f ~ ~ ~ ~ . ~s 4 ~ ~ ~g :} ~ . Y; ~ ~ . "~` ~ 7 t~ &e .. ~ r ~ :y m >. ~ . ~ g . ~ ~ ~` . < ~4~' ~ y ~ Ns~l.ss. ~ ~ t"4' + ~'t .:~ i ~ p f~ '~ .. ~ ~ " x )'" ~ ~ ~ p 4e° ""L- ' , ~ ~ >`2 , ~ <.p~~ ~ ~ ~ ~ : .~ ~~ x ~~.~ '~ •~ ~.x g~ ,~, . > , ~ I °GS ~~ ~~ ~ ~ ~ ~,s . ~..~ ' . a~ ~ ~ '~ ~ ~g ~ ~c ~ ~r ~ "+~r.r 1~ ~~ ~ ~ ' ~ ~ ,~ ~ ~# .~ ,a ,~ , .17 ~,e~ .~a ~ ~ .r ~ ., x $~ ~ & i ~ v, . ~ ~y~ ~ ,,a~ '~y P/~ ~ ~ "8 ~E "~ ~~ 'aY.M ~~ ~ ~ ~ a ~ ~~ . ~_e va? ~4 tl ~ ~~: .: ~ t~ .f 63" ~ ~: ~ ~ ~~ ~ ~ . ~ ~ w F . , ~~ ~ }~~ ~ ~ *4~ ~' ~al +$ ~ ~ ~ ~ ~ ~ ~. ~ ~ ~'c p ..yy ~ ~t ~ .~' ~ ~ ~ . •.~ #,~ ~ ~ gf (.~.. ~ ~ ~'~" ~' ~' '~ ~ ~. ~, i.~ #~ ~ As+.a- 59ff ~ ,~ ~~j( ~ ~ . { K ~~~ ~ ~ ~ ~. yf~~'" ~ 9 ~ ~~ y . q ' :ISiY'' ~ ~ ~#~ .. ~ ~ ;~ i~s ~ i~ ~ . J ~f~ ° d ~`p- ~ '`~. ~ d ~C i "~a~ q{y , ~ ~ j ~ ~a t f ~ ~ ~ ' ` '.,~. . ~' 3 LbR ~µ .~ ~" r .~$ ~.~.~r~-M~ . * Y i r€ $( ~ * y . ~2 s ~ .. ~ ~ ~BK' k"'1~ ~~ & `~fsn ~~ ~~~ "~ ~~ ~ 7 °~ ~~ t'~~ 5 ~ ~ ~ ~'a~i~~%a. ., ~ ~ e#,`r _. t "'d~~~'~ » * ' ¢ b ~ . . . ~ :f ... . ~~ ~ ~ ~ p$ #s ~ ~ . . ' .~... ~p` ~f ~~ ~ . .. ~ ~ .. ... . . Nagell Appraisaf & Consulting ( 952-544-8966 ! www.calEnagell.com ~ 7 DESCRIPTION OF IMPROVEMENTS ~ai~~is~g C~~t~ Type of Building: Multi-Tenant Commercial Building # of Buildings %# of Stories One / One Number of Occupants: 3 Gross Building Area: ` 2~,2~6 ~F (per measurement) Year Built: 1957 Quality/AppeaL• Average Condition: Fair Basement: Full, included in GBA (2 entry/exits} Ty~~ c~~ ~€~~~~r€~~~i~~ Structure: Concrete Block ~Q~f ~~~'#~~~' ' Fl~t (ri~ ar,~Pssl Exterior Walls: Concrete Block, Brick Doors: Metal & Glass Wir~d+~ea~s. Fixed Para~ o ~~~t~~:~~~1~~,~s~~~~~fB~~~.~~~~~~~ HVAC. GFa & CA, space heaters Electrical/Plumbir~g: Adequate / A~rerage Hot-water heater/Sprinkler: Average / Basement Only Elevator/Insulation: None / Assumed Average Energy Mgt System: None noted Security System: None noted Computer Network System: None noted Wired Phone System: Average -) $ Nagell Appraisal 8~ Cansu(ting ( 952-544-8966 ~ www.callnageELcam Description of Improvements - continued ~~t~ri~r ~p~~~ Ceilings: Suspended Tile 1lVallso ', Drywall Floors: ` Carpet, Ceramic Tile, Viny! Lighting: Fluorescent, Incandescent Doors/Trim: Metal, Wood / Average Restrooms: 4, average condition Layout: Average ~it~ I~~rss~r~~ter~ts Parking: Paved, fair condition Landscaping: ` Limited I VV .7~'~'111~~~~.a.~7~'~Jl.~~l. ~. ~.~~~ IVVI~C IIIJLCU I Fencing: None noted ~~~r~~i~~~~~ ' Effective age. 26 years Est. Remaining Economic Life: , 19 years (based on age/life method) PhysicaL• ' Typical for age due to wear and tear. FunctionaL• None, functionai fayout and design. ExternaL Slight, cast and value not presently equal. Deferred Maintenance: Reportedly, roof leaks (see photos) and parking lot is in fair condition. ~ea~~er~ts: The main level is useci for retaii whiie the iawer fevel is used as a bowlir~g alley (bowling alley equipment not included in appraised value). Main level retail units have a rear loading area, each unit with one overhead door. Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnageil.com ~ g BUI~DING SKETCH Main Level = 14,286 SF Basement = 14,000 SF TOTA~ GBA = 28,286 SF 20 Nagell Appraisal & Cansu[ting ( 952-544-8966 ( www.calinagell.com AERIAL PHOTOGRAPHS htagelf Appraisel & Consulting ( 952-544-8966 ~ www.cailnagell.cam 21 F«~~~ L'i~~ Front View 22 tVageli Appreisal & Consulting I 952-544-8966 ~ www.callnagell.com SUBJECT PHOTOGRAPHS ~if~~ vi~irl~ Rear View Nageli Rppraisal & Consulting ~ 952-544-3966 ( www.cafinagell.com 23 SUBJECT PHOTOGRAPHS ~#r~~t Sce:~~ ~aak~r:~ le~r±h ~r~ r~;;#r~~ Q•1~;,~a~ 24 Negel) Appraisa{ & Consulting ~ 952-544-8966 ( www.callnagell.com PHOTOGRAPHS Street Scene ~ooking West on 39t" Avenue N!~~r: ! ev~! !ra#~ra~~ Main Level Interior Magell Appraisal & CansuEting I 952-544-8966 ~ www.calEnagell.com 25 SUBJECT PHOTOGRAPHS R~'"aiii ~.2~rc^~ ~i~i@Ci^vi' Main Level Interior 26 Nagel( Appraisal & Consu6ting ~ 952-544-8966 ~ www.calfnage(I.com SUBJECT PHOTOGRAPHS ~!!a~:: LL\9~! IC'~#~"~!^v" ~::~a#e ~±~e:~~s~ ~e6lsng~ Main Level Interior Nageli Appraisal & Consulting ~ 952-544-8966 ~ www.calinagel0.com 27 SUBJECT PHOTOGRAPHS B~~~r~~r~t sr~er~cr Basement Interior 28 Nagetl Appraisal & Gonsulfing ~ 952-544-8966 ~ www.callnagelLcom SUBJECT PHOTOGRAPHS ~aserr~~~~t ~~rt~r~~~ Basement Interior Nagell Appraisa! & Consulting ~ 952-544-8966 ~ www.caEinagell.com 2C~ SUBJECT PHOTOGRAPHS ~aS~ii~ci'i'~ ~i~i~iit'ii Basement Interior 30 Nagell Appraisaf & Consu(fing ~ 952-544-8966 ( www.callnagelLcom SUBJECT PHOTOGRAPHS ~!le~han~ca~~ Mechanicals tVage[{ Appraisai & Cansuiting ( 952-544-8966 I www.caHnagell.com 31 SUBJECT PHOTOGRAPHS ~ir~ic~iiali~l~ai$ Leakage 32 Nagel6 Appraisel & Consuiting ~ 952-544-8966 I www.calEnagell.com SUBJECT PHOTOGRAPHS HIGHEST AND BEST USE Highest and best use as defined in The Appraisal of Real Estate, Thirteenth Edition, by the Appraisal Institute, is: "The reasonably probable and legal use of vacant land or an improved property, that is physically possible, legally permissible, appropriately supported, financially feasible, and that results in the highest value." Highest and best use is analyzed in two ways, site as vacant and site as improved. T~pic~~~~ there a~e ~ca~ar cra~~:~aa ~~s ~~ghe~~ ~~sa~ b~~~ ~€~e ~€~~#~si~ - Legally permissible uses: What uses are allowed by zoning? '; - Physically possible' uses: What uses are physically possible on the site? ` - Financially feasible use: iNhich possible & permissible uses produce a positive return? - Maximally Productive use: Of the financially feasible uses, which use produces the highest return warranted by the market (the ideal improvements)? ~~~~ ~~ ~~~~s~t Le~al~~ ~~rr~6s~~~6e I~~es: The current CBD, Central Business District, zoning allows for a variety of commercial uses. Primary permitted uses include ofFice, retail, service, restaurant, clinic, financial institution, residential aver main level commercial, etc. ~here is no msnimum ~;te size re ;a;remer+, ..~i±h;r ±he G~~. Ph~si~~~l~ P"~ssi ~~ ~~~e The physical characteristics of the site appear suitable for development. Utilities are available. The site has average access and above average ~isi~ility/~x~~~c~r~. °~;~~ sit~ vv~~ld all~~ f~r n~rri~r~u~ u~~s. F~~~r~~~~~1~ ~~~~i~t~ U~~~m Surr~unding uses along Central Avenue are primarily commercial (retail, office, service, restaurant, etc.}. Therefare, a comrrtercial use wauld likely produce a positive return on investment. Market demand for commercial uses in the subject market is average. Availability of financing is currently fair ta average. Subject does not appear to have significant issues that would restrict typical financing. ~~i~na~t~ F'r~cfu~~~rr~ Us~: Most large commercial sites in the area have land to building ratios that range between approximately 2 and 4 to 1(based on main level GBA only). Given the site area of 102,802 SF, a commercial building that maximizes GBA potential would be logical. New buildings are typically average to good quality and designed for multi-tenant occupancy. Based on the above discussion, the highest and best use for the subject site as vacant would be for an average ta good quality multi-tenant commercial or mixed-use building (as demand warrants). ~lagell Appraisal & Consulting ~ 952-544-8966 ~ vvww.callnageELcam 33 Highest & Best Use - continued ~~t~ ~~ I pr~~~cf This section describes the process of comparing and contrasting the ideaf improvements for the site as if vacant with the existing improvements. L~g~ll~ ~rsa~iss~k~~~ ~J~~~: The current retail and bowiing afley use are considered legal and conforming in the Central Business District. ~hy~ic~ff~ ~~ssib4~ iJ~e~: The current commercial use is adequate far the subject site. However, the existing building is set back from the street, which is somewhat unusual for the area. Although the subject fronts on Central Avenue, due to the building's set-back location, visibility is rated average. F~ra~r~~i~~~~ F~a~~b{~ 11~~~: Continue Current Use: Due to conditian of the subject property, current rental income does not support the existing use on a(ong-term basis (see incame Approach for in-place income valuation}. Renovate and/or Addition: Due to the subject's fair canditian and high land to building ratio, cost ta update, repair and/or add onto the subject building would likely exceed the return on investment. ~tede~~E~q~: D~a~ t~ the d~~lirin~ cQr~m~rcial rr~arkP=*_, d~rnand d~~~ ~ot warrant redevelapment at this time. Therefore, giver~ the soft comrnercial market, the ~urrertt retail/bovvlirrg ~Iley use is ~~nsidered reasonable until demand warrants additional development. Subject does not appear to have significant issues that vvould restrict typical financing. ~~i~~ll~ Pr~~u~fi~r~ ~J~~: The subject's main level GBA of 14,286 SF is small for the site. In addition, the building improvements are dated, worn and in fair condition. In a stronger rnarket, the property ~~vould likely be redeveloped. However, cl~ae to c~rrent market conditions (soft economy, tight credit markets, cautiaus investors), redevelopment is nat considered feasible at this time. Therefore, the current commercial use as an interim use until redevelopment takes place is considered logical. The subject's quality/appeal and multi-tenant design conforms to its surroundings. Based an the above discussion and taking inta consideration the overall market, the highest and best use for the subject property is the current commercial use until demand warrants redevelopment. 34 Nagell Appra'rsal & Consu[ting ( 952-544-8966 ~ www.callnagell.com COST APPROACH To arrive at a conc(usion of value by the Cost Approach, the vacant site value is combined with the estimated cost of the improvements. However, due to the difficulty to which depreciation is calculated for segregated individual costs, an estimated cost of improvements is considered somewhat unreliable. Given the nature of the assignment, the Cost Approach is not necessary in determining value. Therefore, the Cost Approach is not included. Nageil Appraisai & ConsuEting ~ 952-544-8966 i www.callnagelLcom 35 SAI.ES COMPARISON APPROACH The Sales Comparison Approach to Value is predicated upon sales of properties with similar characteristics as the subject. The primary premise of this approach is that the market value of the subject is directly related to the prices of competing properties after adjustment. Adjustments are made in an effort to account for significant differences. ~~pp~y ~~d E3~~~r~d: Sales in the market result from negotiations between buyers, sellers and lenders. Buyers reflect market demand and sellers supply. If demand is high, prices tend to increase, if it is low, prices usually decrease. Demand for properties like the subject in recent years has been generally fair to average. Consequently, prices have been stable to somewhat declining. ~~~~~it~~~~~: The principle of substitution halds that the value of a praperty tends ta be set by the price paid to acquire a substitute praperty of similar utility and desirability within a reasonable amount af time (The Appraisal of Real Estate, 13th Edition). The Sales Comparison Approach is {ess reliable if substitute properties are not available in the market. The subject market is generally stable, consequently, there ~re ~dequate sales ta apply the sales c~rrparisa~ approach ar~d it~rmulate a reiiable indicatiar~ of market value. ~~6~r~~~: ~he market tends t~ force a balance betwsen supply and demancl. Balance can change due to shifts in population, variations in purchasing power, consumer tastes and preference and time. ~~~~~~~~~~~~~: WF~en ~c~ssibie, sefect comparai~les with simiiar iocation, economic conditions and support facilities. t~es~~: Under-improved properties with fair condition buildings and high land to building ratios often sell based on the overall value of the site area. This is due to the generally high land to overall property value ratio. Therefore, similar comparable data will be used with value calculations based on overall site size unit of ineasure (not per square foot of building area). The added value of the building improvements for the subject and comparables will be rated qualitatively and adjusted for on the grid. Vacant land sales are also included. 36 Na9ell Appraisal & Consulfing I 952-544-8966 ~ www.callnage(I.com COMPARABLE LOCATION MAPS , ,~ - _~~~, t, ~'.S ti ~~~ k ~S k "~ ~ i Nmoderest E ~ l ~' s ..,. -~°-°~ S~k~ " u ,~ , a ~ ~ _._ s~ "s~°hx- ~~ ~ ~ ~ - 1 5 ~ y EIm Gaeh ~ ~..__., R E Fd. N i i_" , :.~ .~. p~R~~ '~ ., ~ I ~ ~ :~~} ,~- 'tt. , .~~,,,#~$(.' ~. . ~. F~ ~ ~ mu~ ~ Ctyst~ ~~ 3 ~ € ~t _ 4 ~~ ~ ~ . .~~ { ~ ( ~ .~~ ~,P~, rn --, I Adm4r~ Pmk •~ A '• . ~ ~ ' ~ yF. tn~o . ~: : ~ f ` F~ ' SAZn:~u ~ - '. f ~ f.aqisq ~YMBY' , ~ '~_ .,~, r l~._ u. ~.,ttf. f S q ~ ~ ~ ~i'.., G~ ~~¢- . .. ~'C#YY(„~' . $~f y,. ~ ~s ~ ... .3'- '~~.a 4 ~.. 9 ~ r e 7 ~ ~, /`r ? iVagell appraisal & Consuifing ~ 952-544-8966 ( www.callnageiE.com 37 Sales Comparison Approach -- continued Location: ' 11040 & 11060 Gentra! Avenue NE, Blaine Proximity: 10 rniles narth `Zoningllntended Use: Retail ~ ~~~~~!°~~: ' I ~7~z~~~~z~~J~33 sr. _nnnq. ( T~t~: ~~~• ni/n Year Built: N/A Improvement Ratinge ' N/A Buyer: ' MSP/Blaine, LLC Seller: TJB Development Company ~aurce: CFcEv, ~uye~ Terms: Assumed Cash Equivalent Date af Sale: February 2010 Price:; $1,461,900 Utilities: Available Topography/SoiL Level / Assumed average in upland areas Total Site Size: 156,816 SF ' Used to bracket the subject site size. Comments: Located along the Central Avenue corridor. No building improvements on site at the time ' of sale. Unit Price: ' ~9.32 p~r ~F Nage61 Appraisal & Cansulting ~ 952-544-8966 ~ www.calfnagelLcom 39 Sales Comparison Approach -- continued Location: Proxirnity: ` Zoning/Intended Use: ' `~ga~;P~~: ` T~r'~~i~.~3r~iii:.. . . ~. .~. . . . Year Buiit: lmprovement Rating: Buyer: Seller: ~ource: ' Terms: Date of Saleo Price: Utilities: Topography/Soil: Total Site Size: ' Comments: ' Unit Price: SWC of 61 St Ave & Main Street, Fridley 3 miles r~artheast Industrial / Transit Station ~~.~iv~-^i ~ ~ vv~ a~ ,vvv~ ~~.i 'vvvv ^!!F. N/A N/A HRS for the City of Fridley Main Street Fridley Properties, LLC C~~J, i~uyer Assumed Cash Equivalent February 2009 $3,165,000 Available Level / Assumed average in upiand areas 457,815 SF Used to bracket the subject site size & due to close proximity. Property was appraised for between $2.5 &$2.7 million at the time of sale. However, due to circumstances surrounding the sale, final recorded sale price was $3,165,000. $6.91 ~~r ~F 40 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.calEnage(I.com Sales Comparison Approach -- continued . ~ ~ , y.~;~ ` ~ ~ ,~ ~. ~,a. m ~ ~ _ ~ ~ > <~~.~ , x ~ ~ ~ ~ _ M~ ~ ~~~ ~ ~ ~ _ - __. --- ~ ~~ ~ ~ - - ~ ~ :a ,~ - ~. ~:~.~ ~ ~ ~ ~ - ! 3 p . " . . ~. ~ ~ . ~i . . > ~% .._ c .q~'i ..~.:. ~..,..._ ^ :. ^ . 3 -" : v .. ^ ~'~.: . ~~ . . . . :t'si~. ~ . LQC1t601t: Rroximity: ' ' Zoning/Intended Use: ~ ~~s~~t;P~~: ~ TQ~~~ ~~~: i Year Built: Improvement Rating: Buyer: Seller: ~aurce: Terms: Da#e of Salea Price: Utilities: Topography/SoiL' Total Site'Size: Comments: Unit Price. 4707 Cenfra! Avenue NE, Columbia Hts 1 '/ miies north Retail L ~.~JJi.i~T~L V'lJ~'^'I' ^,!; R N/A N/A Grand Central Cammons, LLC Grand Central Properties, ~LC CREif, puyer, seiier Assumed Cash Equivalent October 2Q07 $1,400,000 Available Level / Assumed average in upland areas 127,929 SF Used due to Columbia Heights location. Area was redeveloped from older commercial to new high-density residential and commercial. ~°t0.94 p~r ~F IVagefl Appraisal ~ Cansulting ~ 952-544-8966 ( www.caE(nagell.cam 41 Sales Comparison Approach -- continued Location: 1425 Caon Rapids Bivd, Coor~ Rapids Proximity: 9 rniles narthwest Zoning/Intended Use: ' Commercial L~~~~!°~~: 23~z~?~~z~zpnna ~ ?~~~?~.~?n~~ ~ T~#~:! ~SA: 3,e~~ cF Year Built: < 1950 Improvement Rating: Fair to Average Buyer: HRA far the City af Coon Rapids Setler: J & S McQuay ~ource: Cr~E~f, ~uy~r Terms: ' Assumed Cash Equivalent Date of Saleo January 2009 Price: $540,000 Utilities: Available Topography/SoiL Level / Assumed average in upland areas Total Site Size. 38,805 SF - Comments: ` ' Purchased by the city for redevelopment. It appears the existing commercial use will remain for the time-being. Unit Price: ~13492 p~r ~F (c~~6~~c~ ar~a) 42 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.corn Sales Comparison Approach -- continued Location: ' 5905 University Avenue NE, Fridley Proximity: 3 miles northeast Zoning/Intended Use: , Commercial ~~s~~!lP~Q~ ' ?~3n~a?ann~~ _~1Q1~~ 1L -~1(l17'~ . ~ i v~c'ii v~Y-~. . .. 7 7F1Q .~F Year Built: 1973 Improvement R~ting: Fair to Average Buyer: HRA for the City of Fridley Seller: ' M & M Molumby Saurce: C~Ev, ~iuy~~ Terms: Assumed Cash ~quivalent Date'af Sa(ea ' April 2009 Price: $305,000 Utilities: Available Topography/SoiL• Level / Assumed average in upland areas Total Site Size: ' 16,900 SF Comments: Purchased by the city for redevelopment. Existing commercial use to remain for at least 12 months. Unit Price:' ' ~~~.05 p~r ~F (c~f ia~ref ~r~ea~ Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnagell.com 43 Sales Comparison Approach -- continued Location: 855 Serninary Avenue, St. Paul PCOXIYt9i'tj/: $ I'Tii02S SE3U$~i@~S~ Zoning/lntended Use: Commercial !..e~allQlQ: ' ?~?a~~~44C~~~, -~?~C~g R -~'!43 ` ~'~t~! ~=8~: a~,1?~ .c~ ' Year Built: 1958 Improvement Rating: Fair to Average Buyer: Part Authority af the City of St. Paul Seller. Anderson Companies, ~P aource: ~RE`J, seii~r, k~uy~;r Terms: Assumed Cash Equivalent Date'of Sale: March 2008 Price: ' $1,822,500 Utilities: Available Topography/SoiL• ' Level / Assumed average in upland areas Total Site Size: ` 171,626 SF Comments: Former bowling alley use. Purchased by the city for redevelopment. Unit Price: ~10.62 p~r ~F (of~aracl area~ 44 Nage(I Appraisel & Consulting ( 952-544-8966 ~ wvwd.callnagell.cam Sa(es Comparison Approach -- continued Location: ' 4040 Bioomington Avenue S, Minneapolis i~roximity: 9 miles south Zoning/Intended Use: Commercia! ~e~ ~y(i~s~~. i.4~Qil~ ~ . ~ ~ n~sz~n ~~~enti 1 1 VGVG~i' la! V~J T'L' ~'w"~ a~3 .~i~: ~ p v 1'~ v~ ~ Year Built: 1959 Improvement Rating: Average Buyer: Paul Thomas Investments, LLC Seller: Harvey L& Rose M Family, LP Source: Gr~tV, buyer Terms: ' CD (28% down @ 9% 16 rnanths} L?ate of Salea August 2006 Price: $475,000 Utilities: Available Topography/SoiL` ~evel / Assumed average in upland areas Total Site Size: 46,295 SF Comments: ' The property continues to be used as a bowling alley. Unit Price: ~1~e26 p~r ~F (cafiar~d ar~ea} Nagell Appraisal & Consulting ~ 952-544-8966 I www.callnage6Lcom 45 Sales Comparison Approach - continued Listed below is the adjustment grid for the comparables listed on the previous pages. Comparable items of significant difference are adjusted for on a per square foot basis. ~' ~ SCtBJEG~ ~ COM!' 1 ~ CflN(~' 2 ~~ ~~ Cb(~P' 3, ~ ~#~ptlP 4' . CQM~P 6'~~ ~ t~ONIP 6 ~ ~ GOt~IP 7 Address 3927 Central Avenue NE, CoWmbia Hts 11040 & 11060 Centrai Ave NE, Biaine SWC of 61st Ave 8 Main St, Fridley 4707 Central Avenue NE, Columbia Hts 1425 Coon Rapids Blvd, Coon Rapids 5905 University Avenue NE, Fridley 955 Seminary Avenue, St. Paul 4040 Bloomington Avenue S, Minneapolis Proximity Subject 10 miles N 3 miles NE 1 1/2 miles N 9 miles NW 3 miies NE 8 miles SE 9 miles S Terms Market Market Market Market Market Market Market Market Conditlons Typical Typical Premium Typical Typical Typical Typical Typical Date of Sale Curcent Feb-10 Feb-09 OctA7 Jan-09 Apr-09 Mar-OB Aug-06 Location Avg/Good Avg/Good Average Avg/Good Avg/Good Avg/Good Average Average + Zoning/Use Commercial Commerciai IndusUPkg Commercial Commercial Commercial Commerciai Commercial Utilities Available Available Available Availabie Available Availabie Available Available Phys Char Average Average Average Average Average Average Average Average Improv. Rating Fair None None None FaidAvg FaidAvg FaidAvg Average GBA 28,286 N/A N/A N/,4 3,475 1,764 46,126 19,612 Yeai6/t 1957 N/A N/A N/A i950 1973 1958 1959 Condition Fair N/A N/A N/A Average Average Fair Average Site Size(SF~ 102,802 156,816 457,815 127,929 38,805 16,9C0 171,626 46,295 Sale Price - $1,461,900 $3,165,000 $1,400,000 $,:~A0,000 $305,000 $9,822,500 $475,000 RateiSF > $9.32 $5:31 $'f0.94 . $t3.92 $18.05 ! $40.62 $10.?6 ADJUSTMENTS - Terms Cash Eq. Canditions Typical 15 io $ale pate C~arrent -1 1 -7 % -17_°la -7 1 -~ % -1 ~ t -6l Net Ad1 - -1 % -22 % -12 % -7 % -S % -41 % -8 % ~~~Live~asa(;F ~ S~.2M $~.35 $3.&3 $12.54 $~S.~S $5.45 ~~ $g..".: Location Avg/Good 10% 10% 5% Zoning/Use Commercial i01 Utilities Available Phys Char Average Improv. Rating Fair 10% 16l 10l S% -5°/ ,5l -10%a Site Size (SFj 102,802 10 J 26 J -15°l0 -251 1~J 1 -15% NstAdjusttnent - ~:2fJf Sp°lfl 10°f -201 -3U% ~~.15°l0 -2481 ~a~~ce~~at~r~~~ ~. ~ _~ ~ ~ - '~~s~i.oa ~ ~ ~a:o~ .: ; .~ ,~~o~~ ~~~ ~ ~~~a~~~~ ~~ , g~~,.s~ ' ~~ ~. ~~o.s~~,. ~ '. ~~;~~ ~~ ~ "Slight deviations may exist due to rounding. Discu~sian of ~Adj~st~e~~s Cash equivalency of sale: The impact financing may have had on the sale price, favorable interest rate or term. All sales were cash or estimated to be near or at market rates. Conditions of sale: Reflects non-market conditions which may ar may not impact market value, such as differing motivations of buyer or seller (related parties, distressed or liquidation sale, assemblage, listings, pending sales, etc.), impending eminent domain proceedings, influence due to tax ramifications, lack of market exposure, vacancy, or leased-fee and fee- simple adjustments. Due to circumstances surrounding the sale, a premium was paid for Comparable 3. All other comparables appear to be normal market transactions. Time of sale: Based on observations of similar market transactions and trends regarding vacancy and cap rates, annual time adjustment of +6% for 2006, 0% is used for 2007, -4% is used for 2008 and -6% is used for 2009 through 2010. 46 ~~9~~~ ~+pP~~~sal & Cansulting ( 952-544-8966 ~ www.cal(nagell.coret Sales Comparison Approach -- continued Location: This adjustrnent is based on the appraiser's judgment. It takes into consideration surrounding land uses, intended use, neighborhood characteristics, area, traffic, exposure and access. Comparables 2, 6 and 7 adjusted for inferior visibility/exposure and/ar less surrounding commercial appeal. Zoning/Use: Comparable 3 adjusted for industrial zoning, which typically selis for a lower price per SF than commercial properties. All other comparables considered competing. Utilities: All comparables considered competing. Physical Characteristics: All comparables considered competing. Building Rating: Given the high land to overall property value ratia, the existing building on the subject site is estimated to contribute only limited interim value. This adjustment is based on the overall condition and appeai of the existing improvements. Camparables 1, 2 and 3 adjusted for r~ot having building improvements on site. Comparables 4, 5, 6 and 7 adjusted for buildings on site with more appeal, utility andlor in better conditian. Site Size: Adjustments recognize that smaller parcels of land typically sell for more per SF than lar~er sites. Comparables 1, 2 and 6 adjusted for larc~er site size while Comparables 4, 5 and 7 adjusted for smal{er site sizes. Concl~sion: Comparables ~sed are rated to be the mast indicative of data analyzed and bracket the subject regarding averall appeal. Other sales reviewed were alder, more distant, ar~dfor ne~ci~d mare aajustment. /~djuszrrients ar~ ~ nad~ on a p~r ~~uar~ foot ~~~i~ ~of ~ite size}. The comparabies utilized in this analysis each have several characteristics in cammon with tr~e subject. vVhiie none are iotaiiy identicai fio tne subjecfi, each represents a via~ie alternative to a prospective buyer of the subject property and, aft~r adjustm~nt, can be uti6ized as an indicator of market value for the subject praperty. After adjustment, the indicated range of value for the subject is from $7.55 to $11.88 per SF with an average of $10.06 per SF. All comparables given equal consideration. Therefore, taking into account the above discussion and the overall characteristics of the subject, including size, location and appeal, a rate of ~~OoO p~r ~~` is considered appropriate. 102,802 SF x$10.00 per SF = $~~V6V9V2~ F~ ~~ L11~ ~IF~~ Y~ LE~ ~ P' 1~~3 ~F'~ A~FE. $'~,02~,40p (6~r~roved site) ~~~~ ~r~~t ~r~~~ ~~~ l~r~~ ~rrl~ ~~1€~~ ~r~af~~i~. NagelE Appraisa! & Consulting ~ 952-544-8966 ~ www.calEnageil.com 4,7 Sales Comparison Approach -- continued Per client request, a land-onlv value is aiso included. The same sales comparables are used and adjusted accordingly. SUH:lEG7' ~ Ct3MF 9' ~ GGlMP 2 Cl3MP 3' :` ~ CflMP 4' COMF 5 CON1P fi CQfu1P' T Address 3927 Central Avenue NE, Columbia Hfs 811060 11040 Centrai Ave NE, Biaine 3WC of 61st Ave 8 Main St, Fridiey 4707 Centrai Ave~ue NE, Columbia Hts 1425 Coon Rapids Bivd, Coan Rapids 5905 University Avenue NE, Fridley 955 Seminary Avenue, St. Paul 4040 Bloomington Avenue S, Mirtneapotis Proximity Subject 10 miles N 3 miles NE 1 1/2 miles N 9 miles NW 3 miles NE 8 miles SE 9 miles 5 Terms Market Market Market Market Market Market Market 69arket Conditions Typical Typicai Premium Typical Typ:cal Typical Typical Typical Date of Sale Current Feb-10 Feb-09 Oct-07 Jan-09 Apr-09 Mar-08 Aug-06 ~ocation Avg/Good Avg/Good Average Avg/~ood Avg/Good Avg/Good Average Average + Zonfng/Use Commercial Commercial IndusUPkg Commercial Commercial Commercial Commerciaf Commercial Utilities P.vailabie Available Available Available Available Available Avaiiable Available Phys Char Average Average Average Average Average Average Average Average Improv. Rating None None None None Fair/Avg Fair/Avg Fair/Avg Average GBA N/A N/A N/A N/A 3, 475 1, 764 46, f26 19, 612 YearBlt N/A N/A N/A N/A 9950 1973 1958 1959 Condition N/A N/A N/A N/A Average Average Fair Average Site Size(SF) 102,802 156,816 457,815 127,929 38,805 16,900 171,626 46,295 SalePrice - $1,461,900 $3,165,000 $1,40Q000 554q00G ~305,000 $1,822,506 $475,000 RatelSF . . . . $9,32 $6.91 `$10.94 $13.92 ' $'18.05 $10.62 $10:26 kDJUSTPCiENTS Terms Cash Eq, Conditions Typical -15 % Sale Date Current -1%a -7%a -12°l0 -7 % -6 % -19 % -8l Nef Adj . . _.. . ~1 % -~2 % -12 ( ~-7% -61 -17 % -& % fffective Rate/5F - ~ ;59,23 $5.39~~ .~.'. $9.63 $1294 ~:~ $16.96 `~. ~ $9~A5 $9.44 Location Avg/Good iG% 10°fo 5% ZoninglUse Commercial 1~% Utilities P.vailabie Phys Char Average Improv.Rating None -45/ -T5% -75% -2al~ Site Size (SF~ 102,802 10 % 20 % -15 % -25 % 10°!0 -15 % ~;*FBtA~jEiStii7ei~t ~ ~~,~~?5f~tl 3~~IS~ ' . ~-.~ ~' ~.~~t0% , , ~ ., ~13L~i5 ' 4~;a~~ ;.. ., ; .:~ „~T<'$6 =''. .: ~~. 0% . . . ,: : . ~A,6~ ... , -3'~°fG . $8~11~::.. ~: -4~J°.k . ., $'1Qei8 ~ :5°l " „$9.32. ~' . -~4}:~ ~ '~G;'~A ~ ~ ~.., .. Conclusion: Comparables used are rated to be the most indicative of data analyzed and bracket the subject regarding averall appeal. Other sales reviewed ~nrere alder, mare distant, and/or needed more adjustment. Adjustments are made an a per square foot basis (of site size). The comparables utilized in this analysis each have several characteristics in common with the subject. While none are totally identical to the subject, each represents a viable alternative to a prospective buyer of the subject property and, after adjustment, can be utilized as an indicator of market value for the subject property. After adjustment, the indicated range of value for the subject is from $6.61 to $10.18 per SF with an average of $9.01 per SF. All comparables given equal consideration. Therefore, taking into account the above discussion and the overall characteristics of the subject, including size, location and appeal, a rate of ~9a0Q ~r ~F is considered appropriate. 102,802 SF x$9.00 per SF = $925,218 ~[ ~ ~~ ~t ~I~l.~~ ~ I l~ L.~ ~ ~ ~~ ~ ~ ~' ~~ : ~925,QOt~ (lar~c~ onT~) 48 Nagell Appraisal & Cansu(ting ( 952-544-8966 I www.callnagell.eom INCOME APPROACH The Income Approach is not considered a reliable indicator of value for the subject property. Given the nature of the subject property (fair condition, high land-to-building ratio, location of site in re(ation to Central Ave), the current commercial use is considered an interim use until redevelopment takes place. As such, most buyers would not purchase the property for long- term investment purposes as-is and would give little consideration to income potential. Therefore, the Income Approach is not included. However, an illustrative Income Approach is included that analYzes the subiect property's existinq rental income. Subject Rental Data: The main level is tenant-occupied while the basement (bowling alley) is owner-occupied. ~ease data for the subject property provided by the client. The subject leases for the tenant spaces are based on modified gross terms. The tenant is responsible for heat and utilities while the landlord is responsible far all remaining expenses (real estate taxes, sewer/water, insurance, maintenance, management, etc.). Unit size, tenant expense and landlord expense have been estimated by the appraiser. The grocery store tenant rent increases to $2,500/month in 2011. In addition, the gracery stare tenant has 1, 5-year renewal aptian ance the current lease term expires. Appraised value assumes no lease buy- out costs. Nagel( Appraisal & Consulfing ~ 952-544-8966 ~ wvdw.callnagelLcom 4,9 The Income/Expense statement belaw uses the estimated net subject rents. The owner- occupied partian assumes a rent rate araund half of the main level rent rate (due to basement focation}. ilacancy and cap rates based on market. RECONCILIATION To arrive at a conclusion of value by the Cost Approach, the vacant site value is combined with the estimated cost of the improvements. However, due to the difficulty to which depreciation is calculated for segregated individual costs, an estimated cost of improvements is considered somewhat unreliable. Given the nature of the assignment, the Cost Approach is not necessary in determining value. Therefore, the Cost Approach is not included. The Sales Comparison Approach to value analyzed recent sales of properties as campared with the characteristics of the subject. Adjustments were made to the camparables ta make them as similar to the subject as possibie. This resuits in an indication of market value at which the typic~l buyer would be willing to pay for the subject praperty. The comparables used are all car~p~ting properties located in the subject rnarket are cansidered to provide a reliable estimate of market value. Sales data for the subject property was felt to be relatively ~verag~, ~he Income Approach is nat considered a reiiabie indicator or vaiue t~r tne subject praper'ty. Given the nature of the subject property (fair condition, high land-to-building ratio, location of site in relation to Central Ave), the current commercial use is considered an interim use until redevelopment takes place. As such, most buyers would not purchase the property for fong- term investment purposes as-is and woufd give little consideratian ta income potential. Although ar~ iilustr~fiv~ inc~rr~~ An~iy~is vv~~ ~erf~rr°r~ec#, ~Q vii~ighfi i~ given in trie iinal value conclusions. Conclusion: The Sales Comparison Approach is the only applicable approach to value and is given ail the vveight in the ~nalysis. The Cost Rpproach and 9neome Apprcrach were not applicable. Therefore, the appraised value opinion is: The market value in fee simple interest as of ~pril ~5, 2~~9Q is: FINAL (3PINION OF MARKET VALUE (improved site); ~1$~~4,Q0~ FINAL OPINION OF MARKET VALUE (land only): ~32~,~t~~ Note: Final value reflects "market exposure" time of under 1 year before the effective date of the appraisal. Changes in the market, management and/or property subsequent to the effective appraisal date could impact market value. rJo hlageli Appraisai & Consu(ting ~ 952-544-8966 ( www.calfnagell.com DEFINITION OF VALUE ~-~K~T V~.LE~~ - The most probabie price which a property should bring in a competitive and open market under ali conditions requisite to a fair sale, the buyer and seiler each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a) buyer and seiler are typically motivated; b} both parties are well informed or welf advised, and each acting in what they consider their own best interest; c) a reasonable time is allowed for exposure in the open market; d) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e} the price represents the normal consideratian far the praperty sald, unaffected by special ar creative financing or sales concessions granted by anyone associated with the sale. ~ocarce: The Dictionarv ot Real Estate Appraisal, 4`" Addition. Appraisal Institute E~v'RdN~E~T~L & ~UOL~'~~S ~o~DIT'~~{~ Regarding any adverse environmental and/or improvement structural conditions (such as, but not limited to, hazardous wastes, toxic substances, mold, construction defects ar inadequacies etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property, none are apparent, however, appraiser is not an expert in this field, value assumes no hazardaus or significant structural conditions exist. Value assumes any abandoned wells will be properly sealed. If any of these conditions exist the appraised value could differ significantly. Nagell Appraisal & Cansuft€ng ~ 952-544-8966 ( www.caflnagell.com 51 CERTIFICATION ( e~r~~~y ~ha~, fie~ tl~e bes~ caf sa~}~ ks~o~~~z1g~ ~r~d b~66~f: 1) The statements of fact contained in this report are true and correct 2) The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analysis, opinions, and conclusions. 3) I have no (or specified) present or prospective interest in the property that is the subject of this report, and no (or the specified) personal interest with respect to the parties involved. 4) I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignrnent. 5} My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6) My compensation far completing this assignment is not cantingent upon the development or reporting of predetermined value or direction in value that favors the cause of the client, the arnount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the inte~ded use ~f this appraisal. 7) My analyses, apinions, and canclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 81 For Wiiliam R. tNaytas, the reparted analv~es; opiniQn~ and conclusions were developed, and this report has been prepared in conformity with the requirements of the Appraisal Institute's Code of Professional Ethics and Standards of Professional Appraisal Practice, which includes the Uniform Standards of Appraisal Practice. 9} William R. Waytas has personally viewed the property that is the subject of this repart. ~tEoEly ~. ~.e~nri~ di~f r~~a~ ~i~~ ~he s~a~je~~ ~ro~erty, bc~~ ha~s b~eaa by th~ ae~~~ esr ~S~~~e~~c~~ mccasions (If more than one persan signs the repart, this certificatian must clearly specify which indi~iduals ~i~ ~~u drh;ch ind;.~iduals ~iu nct r;~ake a Ner~oral insneetior o¢ the ~p~rai~a! pC~NL~~~. 10) Na ane pravided significant professional assistance to the person signing this report. (If there are exceptions, the name of each individual providing significant professional assistance must be stated.} 11} In accordance with the competency provision of the USPAP, we have verified that our knowledge, experience and education are sufficient to allow us to competently cornplete this appraisal. See attached qualifications. 12) As of the date of this report, Williarn R. Waytas had completed the requirements of the continuing education program of the Appraisal Institute. 13) The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representative. William R. Waytas, SRA, CRP Molly J. Lewis Certified General MN 4000813 Certified General MN 20391975 Date: a4~/15f2f31U Date: 04f15B2010 rJ2 Nagefi Appraisal & Consulting ( 952-544-8966 ( wGVw.callnagelf.com EXTRAORDINARY ASSUMPTIONS OR HYPOTHETICA~ CONDITIONS ,As s~ates~ by 6JSF~~~; ~~~r~~rdir~~ry A~~~ara~pt~~r~; An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions of canclusions. None y~c~th~~i~~~ ~~rtd~ti~r~: That which is contrary to what exists but is supposed for the purpose of analysis. ~i r~~~rt~ ~h~t th~ ~~b~~~t ~~t~ ~~~i b~ildi~g ~rr~~r~~~r~s~~~~ ~~r~ ~~i[~ ~~~r ~ f~rr~~r rr~€~r~~~ip~! c#t~ ~ a~~ ~h~t ~it~ ~~r~t~~rt~~~fi~~rt ~~k~[y ~~~~t~, ~~~~~r, ~~r ~i~~~B. ~~~~~~~g ~~~~~E~~t.7 ~~$~~ ~~~~~~~ ~ a~~~8;99~~ ~~~~ ~~~~ ~~ ~~~~~~}~~~~~~~ ~~@.7 ~~~~~~ ~~~{~m ASSUMPTIONS AND LIMITING CONDITIONS 1. The appraisers assume no responsibility far matters of a legal nature affecting the property appraised or the title thereto, nor do the appraisers render any opinion as to the title, which is assumed to be good and marketabie. The property is appraised as though under responsible ownershi~ and goad management. 2. The furnished legal description is assumed to be carrect. 3. Any sketch in the report may show approximate dimensions and is included to assist the reader in visualizing the property. The appraisers have made no survey of the property. It is assumed unless otherwise noted that no survey has been viewed and that all improvements are located within the legally described property. 4. The appraisers are not required to give testimony or appear in court because of having made the appraisal with reference to the property in question, unless arrangements have been previously made therefore. 5. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. Nage(I Appraisal & Consulting i 952-544-8966 ~ www.callnageEE.cam 53 Assumptions and ~imiting Conditions -- continued 6. The appraisers assume that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it mare or less valuable. The appraisers assume no responsibility for such conditions, or for engineering, which might be required to discover such factors. 7. Unless atherwise stateci in this report, the existence of hazardous materials, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials an or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, radon gas, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 8. Information, estirnates, and opinions furnished to the appraisers, and contained in the repart, were obtained from sources considered reliable and believed to be true and correct. However, the appraiser~ can assume no responsibility for accuracy of such items furnished the appraisers. 9. Disclosure of the contents of the appraisaB report is gaverned by the Bylaws and ~ceguiatians OT I(1@ ~7fOT@5SiOftal appr~isai Ut`c~d~llG~iit~ii5 v~iiil i w,iiC1 i iliC aNNiaiSEi ~ ai c affiliated. No part of the contents of this report, or copy thereof (including conclusians as to the property value, the identity of the appraiser, professional designations, reference ta any prafessional appraisal organizations, or the firm with which the appraiser is connected}, shall be disseminated ta the public thraugh advertising, public relatians, news, safes, ar any other pu~lic mears of comr ~ur~ications with~ut th~ priar ~rrritfen ~~n~ent ~n~ ~pprova9 €~f the appraisers. 10. The appraisers have no present or cantempla~~d future interest in the property appraised; and neither the employment to make the appraisal, nor the compensation for it, is contingent upon the appraised value of the property. The appraisers have na persanal interest or bias with respect to the parties involved. 11. The appraiser has personally inspected the subject site. To the best of the appraiser's knowledge and belief, all statements and information in this report are true and correct, and the appraisers have nat knowingfy withheid any significant information. 12. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is our personal, unbiased professional analyses, opinions, and conclusions. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 54 t~agel( Rppraisal & Cansukting I 952-544-8966 ~ www.callnagel(.cam Assumptions and Limiting Conditions -- continued 13. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made a specific compliance survey and analysis of the property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements af the ADA, could reveal that the property is not in cornpliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. 14. No one provided significant professional assistance to the person(s) signing this report. 15. This appraisa! assignment was not based an a requested minimum valuation or specific vafuation or ~pproval of a loan. 16. To the best of our knowledge and belief, the repo~ted analysis, apinians, and conclusions were developed, and this report onras prepared in conformity with the requirements of the Gode of P!'ofe~siot~~! Ethics and the Standards of Professional ~ppraisal Practice ~f the Appraisal Institute. Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.caElnsgelLcom 55 CURRICULUM VITAE Appraisal Experience: Presently and since 1985, l~Jil(~~r~ ~. ~~y~~~ has been emp(oyed as a full time real estate appraiser. Currently a partner and President of the Nageil Appraisal & Consulting, an independent appraisal firm (10 employees) who annually prepare 1,500 +/- appraisal reports of all types. Mr. Waytas was employed with Iver C. Johnson & Company, ~td., Phoenix, AZ from 1985 to 1987. ~r€~~S~rt~~~ ~~pr~i~~c~ Commercial - low and high-density multi-family, retail, office, industrial, restaurant, church, strip-mall, fast-food, convenience stores, auto-service and repair, hotel, hotel water park, bed & breakfast, senior/assisted living, schools/colleges, cinema, marina, campground, lumberyards, numerous special use properties, and subdivision analysis. Residential - single-family residences, hobby farms, lakeshore, condominiums, townhouses, REO and land. Eminent Domain - extensive partial and total acquisition appraisal services provided to numeraus governmental agencies and private owners. Special Assessment - numerous straet improvement and utilities projects for both governmental and private owners. Revi~v~ - residential, cammercia{ and land develapment. Clients - served include banks, savings and (oan associations, trust companies, corparatians, ~~~iornmori.~~ NCulB~, ~C~l~,'C~~~CCllg~'g8 ~~ ~n;.~er3~t~ nf Rfl~nnacn±a RActr~ Ctata l Iniyarcitv ~t. A/~ar~i'c College}, relocation companies, attorneys, REO companies, accountants and private individuals. Area of Service - most appraisal experience is in the greater/metro area (typicaily within 2 hours of downtown metro) of Minneapolis/St. Paul, MN. Numerous assignments throughout Minnesota. €'rc~~~~~i~~~~ ~ b~e~h~~, ~~~~~~t~~~~ A~fE~i~ti~r~~ License: Certified General Real Property Appraiser, MN License #4000813. Appraisal Institute: SRA, Senior Residential Appraiser Designation, General Assoeiate Member of Appraisal Institute Employee Relocation Gauncil: CRP Certified Relocation Professional Designation. International Right-Of-Way Association: Member HUD/FHA: On Lender Selection Roster and Review Appraiser DNR: Approved appraiser for Department of Natural Resaurces ~'es~~ ~~~ -- Court, deposition, commission, arbitration & administrative testimony given. ~d~~~~r -- Court appointed in Wright County. ~fJ@ T16"E'9 [$~~~~ -- President of Metro/Minnesota Chapter, 2002, Appraisal Institute. -- Chairman of Residential Admissions, Metro/MN Chapter, AI. -- Chairman Residential Candidate Guidance, Metro/Minnesota Chapter, AI. -- Elm Creek Watershed Commission, Medina representative 3 years. -- Park Commission, Medina, current 56 Nagell Appraisal & Consulting ~ 952-544-8966 ~ www.callnageEl.com Curriculum Vitae - continued Eda~~~ti~r~ -- Graduate of Bemidji State University, Minnesota. B.S. degree in Bus. Ad. -- During college, summer employment in building trades (residential and commercial). -- Graduate of Cecil Lawter Real Estate School. Past Arizona Real Estate License. General & Professional Practice Courses & Seminars -- Course 101-Introduction to Appraising Real Property. -- Numerous Standards of Professional Practice Seminar. -- Fair Lending Seminar. -- Eminent Domain & Condemnation Appraising. -- Eminent Domain (An In-Depth Analysis) -- Property Tax Appeal -- Eminent Damain -- Business Practices and Ethics -- Scope of Work -- Construction Disturbances and Temporary Loss of Going Concern -- Uniforrn Standards for Federal Land Acquisitians (Yellow Boak Seminar) -- Partial Interest Valuation Divided (Conservatian, Access & Historic Preservation Easements, Life Estates, Subsurface, Air & Water Rights, Transferable Development Rights} Commercial/Industrial/Subdivisian Courses ~ Seminars -- Capitalization Theory & Techniques -- Highesfi & Best Use Seminar -- Generai ~C ~esicieniiai Siate C;ertiTicaiian Keview 5eminar -- ~~I~rliyjcinr~ A~aIY~iS ~~mina~r. -- Narrative Report Writing Seminar (general) -- Advanced Income Capitalization Seminar -- Advanced Industrial Valuatian -- Appraisal of Local RetaiE Properties -- 4ppraising Convenience Stores -- Analyzing Distressed Real Estate ~~ E~,~alu~#irg C~mmerci~l C~r,str~cti~n -- Appraising Distressed Commercial Real Estate Residential Caurses & Seminars -- Course 102-Applied Residential Appraising -- Narrative Report Writing Seminar (residential) -- HUD Training session local office for FHA appraisals -- Familiar with HUD Handbook 4150.1 REV-1 & other material from local FHA office. -- Appraiser/Underwriter FHA Training -- Residential Praperty Construction and Inspectian -- Numerous other continuing education seminars for state licensing & AI Appraising WaterFront and Lakeshore Property ~pe~kir~ ~~~~g~ er~ -- Bankers -- Auditors -- Assessors -- Relocation (Panel Discussion) Nageli AppraisaE & Consulting ~ 952-544-8986 ~ www.callnagell.com rJ7 QUALIFICATIONS Appraisal Experience: Presently, and since July of 2003, €~~~y Jo ~~~ri~ has been employed as a full time real estate appraiser. Currently a commercial appraiser at Nagell Appraisal & Consulting, an independent appraisal firm (8 appraisers} who annually prepares 1,500 +/- appraisal reports of ail types. Ms. Lewis was employed with Paul Folland of Eagle Appraisal for part of 2003. Education: Graduate of Northwestern College, St. Paul, MN. B.S. Degree in Business Administration. Prosource Educational Services • Appraisal 10Q Introduction to Construction Principles • Appraisal 101 Introduction to Appraisal Principles 1 • Appraisal 102 Introduction to Appraisal Principles II •,4ppraisal 103 Intraduction to Appraisal Practices I • Appraisal 104 Introduction to Appraisal Practices II • Appraisal 105 Introduction to Appraisal Standards and Ethics ~4ppraisal Insfitute, Pre-ficensure and Continuing Education Courses • Basin Income Capitalization • Income Va(uation of Small, fViixed-Use Properties • General Applications ~ • ~ ~ nnn a.-,,,..,.t.. ' +.,+ .,n.•I I~GI i 18rui.iJ i;ui.ii j8j i,vVCi ii ~y v~Jrr~r , u ci iua ai iti vai iGuS i ca! c~~a~FC' ai i~a appraisal topics Licer~ses Held: Resident Appraiser: Certified General License #20391975 ~ppraisais ~~r~rr~rrr~~d: Cammercial Appraisal • Agricultural, Residential and Commercial Land ~ Retail • Restaurant • Office • Industrial • Mixed-Use • New Construction • Residential Subdivision • Special Use Properties: Marina, Golf Dome, Church, Airplane Hangar • Eminent Domain, Condemnation Residential Appraisal • Single Family • Twa-Family • Multi Family .rJ8 Nagefl AppraisaC & Cansulting ~ 952-544-8966 I www.callnagell.com ~DDE1~~~ TO APPRAISAL REP£?RT Nagell Appreisai & Consutting ~ 952-544-8966 ~ www.callnageli.com 5g C~[.~L. ~P'E~ ~~~, ~ ~Q6~~~J~~`t~€~ 7~t~ ~~t ~ B~rc~ ~f~ ~I~et~ pt~~i~, ~2 E~~~ ~~~tt~~~li~ EYf#V l~3~~~ ~t P~~! ~5~4•22~1~1~-9 ~ ~is ira ~~8 G ! F~~ 9~2- . ~ t~~r ~@r> ~taek: T~a~k g~+~u fc~c your i~f~r~s~ i~ 's~~~ ~~a~~ ~e~°vvic~s 'c~ tE~e ~ ~~€~n~, t~~r v i€~n, y€~:~ i~~ ~rr a~~°~~s~ r~ ~~~ fc+ ~c~~ r~~ d~ ~e~ ~€~~y ~~ ~~e ~t . P ~~ p ~~ t ~~r ~~° vr~l~ , ~ ~ f ~~ ~:~~~ ~ ~ ~ ~ fe~ p~ s~ ~ ' ~ly rt . i~~~ ~~~+~: ~`!~ r~~ c:~e~ E~ cc~ d~ C~ ~ie~ce~ c.~~~rrra~ic~c, ~r~~ ~t~s~ ~ E~~ ~e .~ ~i~er ~t ~ '~r-< .~r~~: ~~~ e~r i & ~ . l~t ` . ~c~y ~f y d~ ~s~ " ~~ ' €~. f~r e~~g-ar-y ~~ 19 sm~~ya ~t~ ~s~ n€ in k~.s~e ~i~~e 't9~~ arad s 'er~t k+~ ~~s, ~x~ ' ttcae~ ~ fic~n, r~r ~ ~s tt~ ~e~~~y ~te~ ' c~ ~. ~d~h~r er~p~y t tt~ ~~c~ ~~~ ~p - I. c~ar ~~ cc~m~ "c+~t ~c~r €E, ~ ec~ntin~s:crt capon ~e ~~rsi e. 1f ~r~ ~re~ t~ ~ ~~m~$ pd~a~ ~~}n ~~1 r ~~ f ~r r~~~l. [f g~c~c~ ~t ~~ ~ s~c~ , ~~ d~ ~c~ !~s€t ~~ c~sr~ ~~. ~i~ ~~y~ ~ F, ~ .. ~:~r . si~ ' st ^, .,' ~ ~ r^'.'*~~ ~~ . ~" ~ ~E[L@I "~ ~..`~. t 1~trt ~. {~a~ SRf4, CF~~ ~~~~ ~` ~~ ' ~ ~~ ~4C~t~813, ~ ~ ~~' ~ ..~ ~t``~-° ~~ . ~~r~~~~8. a~t 60 Nagefi Appraisal & Consulting ~ 952-544-8966 ~ wwvu.callnagell.com COLUMBIA HEIGHTS EGONOMIC DEVEL4PMENT AUTHORITY (EDA) Meeting of: A ril 27, 2010 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE N0:7 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: F'irst Look Progranl Users BY: Sheila Cartney BY: DATE: April 6, 2010 BACKGROUND: In February of this year the ~DA agreed to particip~~te in the Twin Cities Community Land Bank (TCCLB) "First Look" program. This program allows the City to have t11e "first look" at any REO properties a~1d determine our interest. lf we are not interested then the next look goes to GMHC and if they are not interested the listing goes to the open market. It is set up this w~y because GMHC requesfed access to our city and the EDA approved them as users. In addition to GMI-3C four other entities 11ave reguested to be part of C:olumbia Heights first look. If approved tliese eutities woutd be lisfed aftet~ GMHC in the fiest took order. A lottery systern would ~e set ~n place if rnore tl~an one entit~~ is interesteel in ~aurchasir~g. A small pr~file of each e~ltity and the TCCI,~ criteria is attached. Tt~e fo~zr entities requesting tirst l~ok access are: Everwaod Company (EC} ~s a for-pro~t corporatio~~. Robert Er~7gstrain is a preferred developer in Brooklyi~ Park, MyHarneSource is a well respected for profit developer wl~o works in nn;;;::eu~~~?:s Rrc~ki,~;: p~:k a.;~ ~?:c~k?;~,. ~'~;;ter, a..~ Su:u?: u~ass i~ a±c: ; r~~~:t ~?e~/~?~Ner. !?c~e:~ ~'ng~~r~m ~i:~ Everwood Company are part c~f the 'I~CCLB loan program while MyHomeSource and Sarah I-Iuss use private non- subsidized funds. The entities listed above have been approved by TCCLB as users and are also users in several other cities that ~articipate i1~ tl~ie "~~rst look" pragra~n. Alt users a~sproved by TCCLB have a se~t criterioll for their pai~ticipation (attached). Each house that is purchased must be rehabbed accordii~g to I~UD standards and be sold for lloinec~wnership (hc~ineowners must sign an agi-eement to ow~i and accupy the liome for five yea~rs) to peaple meetin~ 115% Area 1Vledium Ineome whict~ is $96,500. Adding these users t~c~ our "first~ look" pr~gram wc~uld provide additional l~o~neownersl~ip in addition tc~ reha~bilitatio~~ to some of housing stock. As of right now c~ur "tirst look" L~sers are the City and GHMC if neit~her of us are i-~terest~ed zt~ t~he house it t}Zeu gc~es to the open market whicl~ will allow investors to purchase ~nd potentially inerease rental cmits in our single family neighborhoods. if we add these four users we reduce that pc~tet~tiat and get better rehabs. RECOMM~NDATION: Staff recornme»ds approval of the four e»tities listed al~ove as part of tl~e Columbia Heights First Look program. RECQMMENDED MOTION: MOT10N: Move to approve Everwood Compa~ly, Robert Engstro~n, MyNomeSource and Sarah HL~ss as part of the Columbia Heights iirst look program. ~ Attachments: TCCLB criteria and suromar of com ~anics EDA ACTION: Loan Camparison Chart . . . .. -... Owner Occupancy (Yrs.} 5 years Owner Occupancy Declaration Y Homebuyer Affidavit Y Homebuyer Education Y Buyer' Income Limits 115% of AMI Report Buyer Demographic Info Y Geography Municipality-defined "distressed°° areas Develaper must demonstrate how it will assist Hiring Goals peopfe wha represent the communities most heavily impacted by the foreclosure crisis, including communities of color (through employment or contracting ar oth~rwise). Greeca ~or~muniti~s Qr LEED Certification Y ( I ,yl 11~ Sfian~l~r~l~ + ( (i) The furnace has an estimated useful life of at least five (5} years; (ii) The roof has an estimated usefu! life of at least five (5) years; (iii) ~all reh~~ilit~~i~n ~rvork vva~ ~or~~uct~a a~~ completed in compliance with HUD Hausing Quality Standards (Appendix A}, local building cad~ requirements; (iv} With respect to lead paint, for hames built Rehat~ Standards before 1978 all wark must be conducted ~nd completed in compliance with guidelines and procedures provided by HUD; (v) With respect to any asbestos discovered, such asbestos containing materials have been disclosed and were praperly mediated; (vi) Meets all FHA financing standards without exception (Appendix B); (vii} Developer must plant a tree at least 1" in diameter in the front yard if one is not standing. Appraisal As-Is/As-Completed commercially reasonable amounts and Insurance coverages Home Warranty 1 yr ~d~,.~~ .M.,~~.,,,~~~ r~~.~-3..~.~:~.~,~,~~:~,s~,.~~~_~~~.~w~„~.~~.~,~„-~,~~~ .~~~~~~~ ~.~~ ~ ~ ~ ~ _ ~ ~ ~ o p o 4 ~ a; .~-+ ' _ a-+ •'E~' ~ • - ~ T L ~ > O ; ~ ~ ~ ~ ~ ~ ~ ~ ^_ ~ ~ v- ~ {,/) _ ~ y„ ~ ~ = ~ Q ~ ~ p ~ ~ ~ o r .~ ~ ~~ ~ ~ ~ ~ ~ ~ '° ~ ~ ^~ ~ ~ ~ ~ ~ ~ c~ ~ ~ ~ _ > ~ d ~ ~' ~ '- o ~ j ~ N ~5 ° ~ ccS a~ ~ ~ ~ ~ ~ t~ p ~ ~ 3 ~- ~' ~ o Q v O ~ ~ ~~ ``' ~ ~ v ; ~ ~ ~ ~ ~ ~~; ~ o~ t'C~ cv a,, ~ o = : ~ a~ - ~ ~- : ~ '° ~ o ~ ~ ~ .~ 4„ ~ _ ~i tLS ~ ~ ~ ~ ~ ~ ~° .. i f3 tv ~ c~S s~ -~ "t:~ ~ ~ ~ o d ~ ~ ~ O ~ ~ .. o ~crs r- \~ r . ..r ~ = ~ ~ ~1 ~ C7 r" -~ ~ ~ ~a- ~ t~ ~ ~./ ~ e- ~: Cl~ f6 - v ~ ~ ~ ~ o '- ~ i ~'1 ` ~ ~ '1 ~ $ ~~ ~ >. ~ •- ~ o `~ .~ ~, ~' ; v ~ o .~ ~ ~ ~ `~ ~ ~ .-. ~ ~ ~ L ~ ~ '- ~ ~ ,n •~ ~ i _ '~( ~ .w ~ ~ O tt~ ~ ~- N a~,r •* ' ~ i" ~ ~ . ~ ~ ~ •"a o . ~ ~ ~ o ~ ~ ~ ~ O - O w- V ~ ° ~ O a~ ~ ~ ..._ „ O ~ ,F, ~ ~ ~ ~ ,~ ~ ~ ~ ~ L ~ O ~ z ~ ~ O ~ O (V ~ ~ V '~ ~ ~+-- ~+-~ ~ ~ ~ ~ O i ~ ~ ~~ ~ ~ ~ ~s ~ p 4~ ~ ~ ~ o o ~ o ~ o ~ d v v~i ~ u ~ ctt cc~ ~ ~ ~ ~ _ ~ ~ ~ ~ ~ ~~ ~ ~ ,~., ~S O ~ i ~ ~ ~ _ ~ ~ ~ c~ 0 .~ ~ ~ ~ m N J ~ m ~ ~ m (,~ ~ ; . ~ 0 L ~ ~ ~ ~ ~ ~ ..~ ~ swa .. ~ ~ ~ ~ ~ ~ V) ~ °~ ~ ~ ._ ~ .~ ~ d ~ ._ `°~a V ._ ._ .~ .. - ~ ~ ~ °`,~~. ., ~ ~ ~ ~ 0 ~ ~ ~ O V~ ~ i . L R ~ ~ ~ ~ ~ G ~ ~ ~.~~ ~:,.,,~ ~..µ~ ~~~ vi~~~ .~.~Gs ~~~ ~ ~ K~~ ~~~ .. About Us .. __ _ _ __ . ~ , se~~~r er~~ ~etr ~ ~mu I~~%c~~~c~~~c~ ~~~~~~~ c.~~ti~~~ ~ca~~~~~~~n~ r1 t~r~rc~~~~j ~r~>~~r•e~crclz to c~~~crlit,z~ c~~~cxf~tsrricrrzslai~t Page 1 of 1 Everwoad Construction Company is a licensed, banded, and fully insured canstruction company, and written proof of this is provided to every customer prior to the start of any job. Everwood Gonstruction Company provides a wide variety of residentia! home improvement projects including but not limited to; garages, decks, gazebos, large and small home additions, kitchen and bath remodeling, attic and basement remodeling, windaws and doors, roofing, siding, and many other specialized projects. Hi, my name is Christopher Beleal, and 1 am the owner of Everwood Construction Company. My objective is to treat all of my customers like family and treat every home 1 work on as if it were my own. I have over 10 years of combined training and experience in residentia( canstructian and l guarantee at! projects to ful( customer satisfaction. Thank you far visiting our website and thank you for considering ~verwood Gonstruction Company far your residential home lmprovement needs. ~ii righfs resPrveci Gustomer testimanials What do yaur customers have to say? Consider using some space to tell the story of the business through your customers' voices. Their word is more powerful than anything you can say for yourself. Pawered by ~; Microsoft Office Live ~ Create a free websi.te http:l/everwoodconstructic~n.nct/aboutus.aspx 4/20/2010 Page 1 of 2 Sheila Cartney - RE: Criteria ~ ~ N..,,.... ~,,,~.. ..~_..~~ . .. ....... . . .... ~. ~ , w, ,.,,.. ~ < .. ~_ , ~ From: Mikeya Grif~in <Mikeya.Urif~fin@tcclaildbanlc.org> To: Sheila Cartney <Sheila.Cartney~ci~columbia-heights.mn.us> Date: 4/20/2010 7:50 A1V1 Subject: RE: Criteria CC: Tracey Luby <T'racey.Luby(a~tcclandbank.org> Attachments: TCCLB Loan requirement Chart - Minneapolis and FRLP.x1s Sarry this is a late <> I have attached a copy of a list of our requirements and the Devefopers in your Gity are as follows: T~~L. _ L.~a~ _~_r_o~r~rrt CC;sur loan p~rticipa~ts v~r~re put through a rigorous I~FP pracess bc~th developers below h~~e autstanding rep~tations and have been fully vetted financially as welf as for pe~fcrrmance and commitment to providing quality rehabs. Roberk Engstram Gapital Nlanagement, LLC- Owr~ed ~nd apera~ed by Robert Engstrom Everwaod Cc~nstruction - C7wned and operated by David Dye T~~l~_._ ~r~___ t~6~~.i_ 6~~c1_~~a rav~c!_F'~o-t~~rs My Name ~ource LL~ (NlNF~ fin~nced} - Qwned and operated by B~b ~u~ Sarah Huss - pri~ate funds - approved and vetted from an RFQ to gain admittance ta the REO pragram this fall ~et me know if you need more informatian. file://C:ADocuments and Settings\sheilac\Local Settings\Temp\XPgrpwise\4BCDSCBBechgwl... 4/20/2010 Page 1 of 2 Sheila Cartney - RE: More info ~ ,:~M,. , ~,, ~,~ r w r~. ~ ~~.~ .~ . ti ~__.~ . w .~ ~ ~. ~ s ~ ~ ~ , -. ~., ~~ ., ~ . , . _~. ~ . , . ~ ~ From: Mikeya Griffn <Mikeya.Griffi~z(~a,tcclandbank.org> To: Sheila Cartney <Sheila.Cartney@ci.cohimbia-heights.nln.us> Date: 4/20/2010 10:26 AM Subject: RE: More info You are correct, Sarah is a real estate agent who does develapment/rehab as well. She has a solid reputation in the City of Minneapolis and performs quality rehab vvork. Sarah has 20 years of rehab and Nlulti Family housing experience working for Nan-Profit businesses such as Aeon and (~eighbarhaad Nousing Services. She has been a real estate agent since 2006. Sarah does not da very many rehabs in a year (5-10 yearly} and works mainly in Minneapalis but wanted the opportunity to purchase in Columbia Heights. Lef ine know if that is enaugh info. Thanks 1} Sarah Huss • WBE • Principal is North Minneapolis resident • Construction, rehab and development experience. • Market real estats expert Mikeya G. Griffin Paralegal Twin Citi~s Comi~uo~ity ~and Ba~k 615 FirstAvenue NE, Suite4la Minneapolis, ~llR! 55~13 612-238-8755 direct 612-238-8219 fax mikeya.griffin a~_t_ccf__a_ndbank,_org ~: ~~ ~ , ; 3 = ;, °t~;,~~~~~ r~~~~~~.,~;~ ~.:F~:~~a~~~.ESSe.g~~.~ l.a~~~~~::~ [..~e~se~ €>,x w, e.y Fz°e~}stt = e .anv. Sta . ~~, aas. E ,_~,~ a ,,...w,s, ..3,.... ~ From: Sheila Cartney [mailto:Sheila.Cartney@ci.columbia-heights.mn.us] Sent: Tuesday, April 20, 2010 9:56 AM To: Mikeya Griffin Subject: More info Mikeya - can you provide me more information about Sarah Huss, I can't find anything on her. Is this a company? I found online a Sarah Huss that works with Edina Realty?? I need to provide some back ground information on each company. Thanks! file://C:ADocuments arrd Settings\s11ei1ac\Local Settings\Temp\XPgrpwise\4BCD8146eehgwl0... 4/20/2010