Posted: 4/16/03

EDA OKís downtown land sale

Cliff Buchan
News Editor

Park Placeís advance north on Lake St. in downtown Forest Lake will proceed following a key decision Monday.

The cityís Economic Development Authority voted 4-0 with one member absent to sell two parcels owned by the EDA to the Park Place developer as part of a development agreement between the EDA and FHV Development, LLC.

Mondayís decision came after an EDA public hearing to consider the sale.

FHV acquired and demolished the five southerly parcels on the east side of Lake St. and has the three-story mix of retail, office and housing space well under construction. A fall completion is anticipated. Construction of the second phase is expected to begin in May once title to the last two parcels is obtained.

Although the developer acquired the south end of the project site on its own, the EDA was involved in the purchase of the final two parcels ó the Van Wirt Building and the three store fronts owned by Perry and Luella Schneller. The EDA entered the picture when the developers could not negotiate purchase terms.

That changed with the EDAís involvement and the possible use of eminent domain to acquire the land for the project.

The EDA first negotiated the purchase of the Van Wirt Building for $342,500 plus relocation costs. Terms for the Schneller property were reached this spring with the EDA acquiring the parcel for $325,000 plus relocation costs.

Sale terms

Under the action approved Monday, the EDA will sell the parcels to FHV Development for $425,000. The $425,000 is an amended developer contribution to the project approved in February.

When the development agreement with the EDA was signed in April 2002, FHV agreed to contribute an additional $365,000 for acquisition costs.

EDA Attorney David Hebert said he expects the land transfer to take place in early May.

The Schnellerís Balloon Shop, Dona Leís Cafe and a basket shop must vacate the buildings by the end of April. Sunday, April 27 is the final day of business for Dona Leís.

Demolition costs will be the responsibility of FHV.

Under the development agreement with FHV, the EDA has approved tax-increment financing assistance over a 10-year period.

FHV will be reimbursed for its actual cost of acquisition of land and buildings for Park Place in an amount not to exceed $1,535,000 from and to the extent that tax increments are derived from the project on a pay-as-you-go basis. The pay-as-you-go method places no tax obligation against the city and relies on the project being successful and generating income, Hebert said.

Once the 10-year pay-as-you-go TIF program concludes, the property tax base generated by Park Place will go in full to other taxing agencies ó the city, county and school district.

The EDA board also accepted findings and decision prepared by Hebert that outline terms of the sale. The findings stipulate that the project is in accordance with the public purpose and provisions of state and local laws.

Lake Park update

In regard to a second downtown proposal, the EDA this week extended an invitation to help move negotiations between the Lake Park developers and Jackie and Dwayne Fladland, owners of the Forest Theater building.

The Fladland were at Mondayís meeting and expressed frustration again that an EDA development agreement with the developers of the restaurant project has tied up any plans the Fladlands may have to develop or sell their property.

Under the development agreement, the land where the theater building stands is earmarked as future parking area along with the Forest Laker property. The Lake Park plan calls for a restaurant and banquet facility on land that is now municipal parking area adjacent to Lakeside Memorial Park.

With negotiations between the Fladlands and the Lake Park developers not moving, EDA President Ray Daninger offered the EDAís assistance in form of an EDA-paid appraisal of the theater property to help bring the two sides together for a sale.

The Fladlands said they would discuss the EDA offer with their attorney and get back to the EDA on or before its next meeting on Monday, April 28.

Daninger also assured the Fladlands the EDA would act on the Lake Park plan in a ìreasonable amount of timeî but could not say how long that may be. The Fladlands said they would like the EDA to release their property from the development agreement soon.

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