Port authority sells Genz Ryan propertyMore changes are eminent for downtown Rosemount but this time it won’t be the city leading them. The port authority will sell the property commonly known as the Genz Ryan property to developer and construction company Kraus Anderson.
By: Emily Zimmer, Rosemount Town Pages
More changes are eminent for downtown Rosemount but this time it won’t be the city leading them. The port authority will sell the property commonly known as the Genz Ryan property to developer and construction company Kraus Anderson.
On Tuesday night the Rosemount Port Authority approved a purchase agreement with the large developer and construction company. The land is at the corner of 147th Street and South Robert Trail. The city will sell the property to the company in two phases. The city will receive $351,000 for Phase 1 which has about 54,000 square feet. For the second phase the city will receive $511,000 for 73,000 square feet.
Kraus Anderson plans to build 12,000 sq. ft. of office/retail space on the first phase, which it hopes to close on as soon as possible. For the second phase, a 15,000 building with office and retail space is planned. The second phase will not be purchased until June 2010.
Matt Alexander, a representative with the company, said an anchor tenant has already been found for the first building.
Although purchasing the property will come in phases, Kraus will have access to both plots. While it’s doing demolition on the first phase, it will also demolish the second. Although the city will still own the property.
Kraus Anderson, according to the purchase agreement, will be responsible for all costs associated with demolition and preparation of the property for development.
At the April 15 port authority meeting, Alexander said if in some event Kraus does not purchase the second land plot, it will be cleaned up and ready to sell.
Closing on the property is uncertain because the Minnesota Department of Transportation has a right-of-way easement on the property. The city will have to get everything settled with MnDOT before it can move forward, which could be a lengthy process.
Kraus Anderson contacted the city several months ago hoping to reach a deal for the property. The port authority approved a draft of the purchase agreement at its April 15 meeting after it made a few tweaks.
The city purchased the Genz Ryan property as part of its plans to redevelop downtown. For the last few years the city has leased out space in the buildings on the property.
In other business, with the approval of a tax increment note Stonebridge Development is set to close on the Core Block East property June 10.
The property is located on the Northeast corner of 146th Street and South Robert Trail. Stonebridge plans to build a three story mixed use building that will include more than 100 apartments and commercial space on the main level.
After some confusion about whether the bond should be tax exempt or not, the port authority approved the sale of a $1.5 million Tax Increment Revenue Note. There was some question what tax status the note should have. So the commission approved a resolution with the stipulation that if the status were to change it would come back to the commission, which would have pushed off closing on the land.
However, acting city administrator Kim Lindquist said the issue had been resolved and that the bond would remain a taxable note. Closing should happen on time.
The tax increment note is a pay-as-you go bond so Stonebridge will not receive any money until the Core Block East project is done. However, the company can use it as collateral when obtaining a loan to build the project.
Tax increment financing is a tool governments use to finance improvements. When a project, such as the Core Block East project, is built it increases the taxable value of the land. The increase is then used to help pay the debt on the project.
Stonebridge president Wally Johnson said the company hopes to begin demolition of the property sometime the week after closing.
Some clean up has already been done. The company ran some environment tests and found some contamination on the site. He said some gas was found near an old gas tank along with some other stuff.
It has already been cleaned up, Johnson said. In an agreement with the city Stonebridge agreed to pay up to $25,000 of the environmental clean up costs. The cost for the clean up came in under that price so Stonebridge paid the entire amount.