Posted: 5/15/02

Downtown plans advance

Cliff Buchan
News Editor

A key step for one downtown project was completed Monday and the Forest Lake Economic Authority board heard positive reports on three redevelopment projects that now seem headed for construction this year.

At Mondayís regular meeting, the EDA voted 4-0 to award a contract to Dresel Contracting, Chisago City, for utilities and street and parking improvements on and south of E. Broadway Ave. The work is tied to the development of The Plaza, a Gaughan Properties project slated to break ground this spring.

Dreselís low bid was $1,082,636.48. Forest Lake City Council, which also approved the award at its meeting Monday, received four bids for the contract.

The EDA this week also heard updates on the three downtown projects: The Plaza, the FHV development for the south end of N. Lake St. and what is now called the Lake Point restaurant development. The latter involves the Paidar partnership on what is now municipal parking lot.

Lake Point

The Lake Point development has traveled light years during the past two months. Earlier this spring, EDA members feared the project would not meet required schedules, but based on reports at the past two meetings, the restaurant development is on track for a fall construction start.

Mike Muske, a partner in the Paidar group, was joined by restaurant architect Jeff Witt and developer Pat Pellstring who presented preliminary design plans for the 20,000 square foot complex which will be built directly west of the former mini-golf business which the city now owns.

The complex will feature a first floor restaurant with seating for 200 and a sectioned off bar area. A lakeview dining area is part of the plan with an outdoor patio dining area to have direct access to customers coming to Forest Lake by boat who will utilize a new dock and marina area.

A second floor banquet facility would contain three sectioned off rooms that can be combined into one large facility with seating for 300-400 depending on seating arrangements, Witt said.

The developers said they are exploring a third floor addition that would add housing units above the banquet facility and garage space on its north side. Witt said he will return to the EDA in two weeks with an advanced design that will show in more detail how the facility will look.

City tax-increment financing expert and development consultant released a preliminary report on city involvement in the project Monday. Details are still being massaged for the formal development agreement.

Wilson said the preliminary report calls for an EDA contribution of $575,000 for the acquisition of four parcels with the developers to pay any excess land cost. Plans call for the project to acquire and remove what is now the Forest Theatre building, the Forest Laker building and the former Klein Johnson insurance building.

The developers must negotiate a purchase price with the city for the parking lot area where the project will be built. Wilson is estimating relocation expenses of $185,000.

FHV project

EDA Attorney David Hebert said appraisals have been completed on the three store fronts owned by the Schnellers and the Van Wirt building. The four parcels on the northern link of the FHV proposals calling for the construction of a three-story mix of commercial-housing units from the My Place cafe building north to the Franklin Building.

With appraisals now in, Hebert presented two condemnation resolutions for EDA review, but did not call for action.

Under the development agreement, the EDA has 30 days to negotiate a purchase and avoid use of eminent domain to acquire the properties. The FHV group sought EDA help after private attempts to buy the parcels failed.

FHV has agreed to invest an additional $400,000 to acquire the two parcels with the EDA committed to picking up any cost above the $400,000 level. A fall construction start is the goal for FHV.

The Plaza

With utility bids approved for utilities and street and parking area, The Plaza is expected to break ground during the next month.

The EDA voted 4-0 to approve agreements with two property groups south of E. Broadway who provide land needed by the city to complete the improvements. Land to be acquired from Howard and Ann Ruggles is subject to an eminent domain taking.

Hebert recommended the agreements with Greg and Christine Underdahl and a new partnership group, Lake and Broadway, which is buying the Upperdeck restaurant property from Grace Haines. Hebert said the two parcels provide the lionís share of the land needed by the city to provide the new drives and parking needed south of E. Broadway.

The agreements call for the property owners to donate land to the city with the city agreeing to maintain the public areas in the future.

Regarding the Ruggles property, Hebert remained hopeful a settlement can be negotiated and a court ruling avoided. A court ruling for the ìtakingî was uncontested and Hebert said he is awaiting a settlement offer from Ruggles.

ìWhether we can settle, I donít know,î Hebert said.

Title to the Ruggles property will be needed by the end of May in order for the work to begin on The Plaza, he said.

Engineering update

While the award of bids for the utilities and public improvements was seen as good news this week, there is some bad news tagged to the award. The $1 million contract exceeds engineering estimates of $869,891 for the work.

Paul Hornby, city engineer with TKDA, said multiple mobilization of work crews was a major factor in driving up the cost estimated by engineers. With the four bids grouped closely, Hornby said he recommended moving ahead.

The award does not include engineering fees and other legal and administrative costs which were not part of the award. Those costs are expected to exceed 10 percent, Hornby said later.

An additional $100,000 for Xcel Energy work tied to underground utilities and decorative lighting in the south end must be added to the total project cost, he said.

The south end work could inflate the utility budget for the south and north end projects. The city has a $2 million budget for all utility work needed for the redevelopment project with TIF funds expected to cover the cost.

Second phase decorative lighting and other Xcel work will also add cost to the project, the engineer said.

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