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I I I Council Meeting Minutes May 24, 1994 Page 9 Council Business. continued Locke presented for consideration the acquisition of the lands by eminent domain. The City entered into an agreement with the Rottlund Company for redevelopment of Site A. Under the agreement, it is the City's responsibility to acquire the parcel in a timely manner. Phase 1 has been cleared and is ready to be transferred. The agreement requires the City to assemble the property, relocate the current businesses, demolish the buildings, and address any environmental issues. Motion by Williams, seconded by Benke, to WAIVE THE READING AND ADOPT TIlE RESOLUTION AUTHORIZING THE ACQUlSmON OF THE ROITLUND HOMES REDEVEWPMENT SITE LANDS BY EMINENT DOMAIN PURSUANT TO MINNFSOTA STATUTES SECTION 117.042 RESPECTIVE DEVEWPMENT DISTRICT NO.1. 5 Ayes - 0 Nayes, Motion Carried. Fulton presented for consideration the construction of a third floor for the Family Service Center. Council directed staff to analyze the merits of constructing a third floor. The City's construction manager, Adolfson and Peterson, estimated the construction cost for a finished third floor of 17,200 sq. ft. space to be $1,084,386. This includes a contingency amount of 10% or $95,691. Fulton expects this budget to be very conservative and suggests the overall construction cost of the shell to be about $830,000; and finishing of the interior space to cost an additional $250,000. Fulton asked Towle Realty to complete a mini-market study of the office environment within and adjacent to New Brighton. The report reviewed and considered factors relating to current office occupancy rates; current market rents for office uses; potential absorption rate and time periOdS for renting additional office space. Steve Carlson, Towle Realty, said the study identified and surveyed a 3 mile radius where competition exists for office tenants. The study determined that the Center would compete with other Class C and D properties as well as office showroom! business centers. The Center would not compete well with Class A and B properties because it does not possess the n corporate atmosphere n and there are concerns relating to its layout and nature. The targeted tenants should be government agencies, non-profit organizations and local businesses which typically cannot afford the higher rates and stay within that $11-12 per sq. ft. range. There was some concern regarding parking and entrances; but location, appearance and the fitness center are considered pluses. The real estate taxes for offices located within the Center's market area average $3.00-3.25 per sq. ft. The projected absorption period would be about 9 to 18 months, assuming 17,000 sq. ft of lease area. Carlson acknowledged that the study was difficult to compile because of the Center's unique nature. Council Business Acquisition of Rottlund Townhome Property by Eminent Domain Report 94-130 Resolution 94-131 Potential Construction of Third Floor for the Family Service Center Report 94-131