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10-18-82 agendaHOUSIIQG AND REDEVELOPMENT AUTHORITY Office of~-Executive Director HRA Letter No. 39 Agenda October 18, 1982 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Report and Recommendation on Consultant's Selection Cedar Avenue Liquor Store Site Study On June 1, 1981, the HRA was presented with a report re- garding~the feasibility of a tax increment revitalization pro- gram for the Cedar Avenue area in the vicinity of 66th Street and north to 635d Street. The commission decided to take no action at that time. The Cedar Avenue Liquor Store is located within the study area. The Cedar Avenue Liquor Store site would in itself be an important element of any revitalization program in that it is underveloped and tax exempt. The city council authorized the city staff to solicit consultant prop- osals for a market study of the liquor store site in an effort to identify the most viable future land use. .Four firms were invited to submit a proposal. Two firms responded: James B. McComb and Associates of Minneapolis, and Engineering Plus of Ames, Iowa. Engineering Plus was teamed with Zuchelli, Hunter and Associates, Inc. of Annapolis, biaryland. The staff has evaluated each firm by reviewing their proposal, interviewing principals and contacting previous clients. Each firm is highly regarded and has related experience. The study would evaluate the marketability of the follow- ing uses: hotel or motel, retail shops, office and/or ware- house and housing -- both subsidized and market. The evaluation would be undertaken in two phases. Phase I would identify the least marketable and most marketable uses and would also assess optimum development levels in addition to providing a financial analysis. Phase II would examine the most marketable uses in more detail and make recommendations based on the results. The cost of_each proposal varied. McComb and Associates indicated that Phase I would cost up to $11,600. Phase II would cost from $2,500 to $5,000 depending on the result of Phase I. A Phase Ii office analysis would cost less than a motel analysis, for example. Engineering Plus has estimated the total cost of Phase I and Phase II not to exceed $17,500. Their study would contain a conceptual design element in Phase II which McComb's would not include. HRA Letter No. 39 -2- October 18, 1982 It is recommended that the HRA recommend. to the city council that a market study be undertaken and that the firm of James B. McComb and Associates be selected as the consultant. The rlcComb firm is a respected company, they have related ex- perience, are loeally.based and have tied Phase I to a.specific not-to-exceed figure of $11,600. Respectfully submitted, ~~ ~~~~~ Karl Nollenberger Executive Director • cc: Community Development Director Housing and Redevelopment Coordinator KN/eja HOUSING AND REDEVELOPMENT AUTHORITY Off ice of Executive. Director HRA Letter No. 38~ Agenda October 18, 1982 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Future of Former Phillips 66 Station, 744 West 66th Street and Craswell Studio, 732 West 66th Street An item is listed on the October 18 HRA agenda to deter- mine the future of two structures in the Godfather block, the former Phillips 66 Station and Craswell Studio. The former. service station is unattractive in~:appearance. For several months, the building was somewhat hidden by the Lake Shore Drive condominium construction workers motor vehicles. However, the number of workers is decreasing and the building is becoming more visible. It is, perhaps, the ugliest building in the L/H/N. It is also directly across 66th Street from the almost completed and presently occupied condominium. The property at 732 West 66th Street was purchased in July of this year. The previous tenant, a frame shop, has moved from the property. The insurance agency, which is presently occupying the structure, will relocate by November 1. The Rich- field Community Ministry is using a portion of the structure for a Halloween "spook house" until November 1. An advertise- ment for the rental of the property has appeared in the Minnea- polis Sunday Tribune on three occasions However, only three inquiries have been received. A similar advertisement appeared in the Sun Newspaper with no response. The three callers deter- mined that the property was not suited for their use. (The advertisements indicated that the rent was negotiable). The property inside as well as as a dwelling and has been occupied lavatory and orate: secure because of is in poor condition and unattractive on the the outside. It was originally constructed has been-:modif ied several times. The structure by two tenants. However, there is only one r closet. Thus, the two tenant spaces are not the need to share common facilities; also, the utilities are not separately metered. The rental policy set up in previous years and followed by the staff is to charge a rent commensurate with holding costs. That would equal approximately $750 per month, plus utilities, while the condition of the property does not justify the rent level. HRA Letter No. 38 -2- October 18, 1982 It may'take considerable time to rent this property, since marginal properties often attract only marginal occupants. While the structure is vacant, heat will be required. Removal of the structure would reduce holding costs 'substantially. Staff has solicited demolition bids for these two proper- ties. The Uniform Municipal Contracting Law permits the solici- tation of bids informally on projects less than $10,000. The following bids were received: Bidder 732 744 Turner Excavating $6,050 $4,400 Ray Anderson & Sons ~ 3,500 4,500 Carl Bolander 5,200 5,400 MN Lumber & Wrecking 4,325 4,200 The impact of demolition on discussions with redevelopers would not be significant. In the case of Mr. Derrick from New Age Developers, the HRA has agreed to provide a credit for the cost of demolition. It is recommended that the HRA take the following action: Authorize staff to contract with Minnesota Lumber and Wrecking Company for the demolition and clearance of the former service station facility at 744 West 66th Street, authorize staff to negotiate with potential tenants at a marketable rent level and to contract with Ray Anderson and Sons to demolish 732 West 66th Street if a tenant is not found for this property by Nov- ember 8, 1982. Respectfully submitted, y~t~~~` Karl Nollenberger Executive Director cc: Community Development Director Housing and Redevelopment Coordinator KN/ ej a