1998-10-28 Meeting Followup Re: CostsGULVER SHERIDAN KNOWLTON EVEN & FRANKS
•
FRED C. GULVER, JR.
JAMES M. SHERIDAN
MICHAEL M. KNOWLTON
KEVIN B. EVEN
EUGENE A. FRANKS
October 28, 1998
A PROFESSIONAL. CORPORATION
ATTORNEYS AT LAW
250 TERRACE PLAZA, P.O. BOX 629
MUSKEGON, MICHIGAN 49443
FAx:616.724.4330
PHONE: 6i 6.724.4320
VIA FACSIMILE (612-497-3210)
Mr. David Lund
City Administrator
City of Albertville
5975 Main Ave., N.E.
P.O. Box 9
Albertville, MN 55301
• Re: Minneapolis Factory Shopper
Dear David:
DOUGLAS W. POLAND
DAVID E. WATERSTRADT
FOSTER D. POTTER
OF COUNSEL
We appreciate the fact that you, Ms. Stalberger and Mr. Berning met with us on Tuesday,
October 27, 1998.
We considered this to be an extremely productive meeting. My clients are very excited
about developing a first class outlet shopping center in the City of Albertville.
As you are aware, JMJ Properties has been very concerned about the extent of the City of
Albertville's fees that were to be charged against the project if it were developed, We
now believe that alternatives have been presented by the City and the developer which
will allow the project to move forward.
Our discussions on Tuesday centered around the fact that for any fees which are charged
on a per acre basis we should only be charged for the actual acrea eg being_developed at
this time. In order to apply this concept, we agreed to remove from the land which would
be subject to the payment of fees all of that property that will either never be used as
development property or will be used, if at all, in the future.
The developer is buying approximately 106 acres of real estate. At the meeting it was
agreed that certain parcels should be deducted from the 106 acres for the purpose of
• computing certain of the development related fees and charges. Specifically, the
Mr. David Lund
October 28, 1998
Page 2
•
approximately 38 acre parcel of industrial land to the north side of the commercial
property should be deducted because it is not being developed at this time and in fact may
be developed by others, unrelated to JMJ Properties, in the future. Outlot A which is
approximately 20 acres ofnon-buildable wetlands to the south of the proposed
development along I-94 should be deducted. This property is not only completely non-
buildable, but in accordance with the City's request we are showing it on the plat as being
reserved for future highway access to I-94. This fact will also be confirmed in the
Development Agreement. Outlots B, C, and D which each consist of approximately 1.2
acres or a total of approximately 3.6 acres should be deducted as they are not scheduled
to be developed at the present time. We agreed with you that the appropriate fees for
these three outlots should be paid at the time they are developed. We also agreed that the
To~~vn Center is being created as a focal eienient with a gazebo and ponding should be
considered apark-like credit and therefore should be deducted from the acreage subject
to fees.
We would summarize the above concepts as follows:
Entire Property
Industrial Land
Outlot A
• Outlots B, C, and D
Town Center
Total Acreage Deducted
Total Net Acreage
@ 106 acres
@ -38 acres
@ -20 acres
@ - 3.6 acres
@ - 5 acres
66.6
39.4 acres
Based upon the above we agreed that using 40 acres for the computation of fees was
reasonable.
The revised fee structure then would be as follows:
1. Site Plan Review (Est.) 20,000
2. Park Deduction fees
50% of 10% of value of
developed land =
(40 acres @ $10,000/acre x 10% - 2) 20,000
3. Building Permit Fees 18,000
4. Plan Review Fee, Plumbing Permit
• Fee, HVAC Permit Fee 40,500
CULVER SHERIDAN KNOWLTON EVEN & FRANKS
Mr. David Lund
October 28, 1998
Page 3
•
5. State Inspection Fees 5,000
b. Sanitary Sewer Trunk Access Charges
$1400/acre x 40 acres 56,000
(Possibly $500/acre if an additional
lift station is not necessary)
7. Sanitary Sewer Access Charge 227,555
8. Water Trunk Charge
Est. $1000/acre x 40 acres 40,000
9. Storm Sewer Connection Charge Waived
CITY FEES & CHARGES 427,055
Our client would be willing to give the City of Albertville an alternative with regard to
the payment of the City of Albertville's fees ($427,055.00). The City could elect either
of the following options:
• Option 1: The developer would pay the fees, charges, etc. in the amount of
$427,055.00 to the City of Albertville in the form of assessments or additional ad
valorem real estate taxes spread over an 8 year period commencing when the first
phase of the shopping center opens with interest at the rate of 6% per annum. We
believe this would generate approximately $67,336.69 annually to the City of
Albertville;
or
Option 2: Our client would transfer ownership of the approximately 38 acre
parcel of industrial land to the City of Albertville in exchange for 100% of the
fees, charges, costs, etc. which would o±herwise be paid to the City of Albertville
or agencies controlled by the City of Albertville.
As you are aware, each of the alternatives presented in this letter is contingent upon the
developer and the City of Albertville entering into a mutually acceptable Development
Agreement which can be signed and completed in a prompt fashion.
•
CULVER SHERIDAN KNOWLTON EVEN & FRANKS
Mr. David Lund
October 28, 1998
Page 4
•
Again, thanks for your time and cooperation.
Si c rely yours,
`'
ichael M. Know o
MMK/rt
cc: James A. Morse, Jr.
Robert Morse
Steve Smallbone
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CULVER $HERIDAN KNOWLTON EVEN & FRANKS