1. Market Street Mall Redevelopment
July 14, 2015

2. Introduction Cal Brink, Economic Development Director
Brian Pellowski, PBK Investments (overall developer).
Eric Miller, Sambatek
Introductory Project Background
Actions This Evening:
Resolution Granting Vacation of a Portion of Peterson Street
Resolution Approving Marshall Square Addition Final Plat
Consider & Approve Ordinance Amending Chapter 86 of the City Code of Ordinances relating to Planned United Developments
Adopt Planned Unit Development (PUD) Agreement
Resolution Approving Contract for Private Development
Resolution Approving Reimbursement for TIF proceeds
HRA Meeting Tonight Adopt Resolution

3. Project Summary Mall Demolition Development Site Plan
65,488 sf (45% of total)
Mall Improvements $5.95M
84,070 sf
Mall Retail Lots $1.96M
20,700 sf (4 bldgs.)
Apartments $7.11M
72 units
Hotel $4.28M
56 rooms
Development Site Plan

4. Project Construction Schedule
Mall and Retail
50% complete by December 31, 2016 and 100% complete by December 31, 2017.
Apartments
25% complete by December 31, 2015 and 100% complete by December 31, 2016.
Hotel
Development Site Plan

5. What Is Tax Increment Financing (TIF)?
A financing tool
Used by local governments
Finances qualifying costs of new development or redevelopment
Uses the incremental increase in taxes
Prequalification findings (complete)
Redevelopment District
“But for” TIF the project would not occur
Conforms to City comprehensive plan
Will afford maximum opportunity for redevelopment by private enterprise

6. Historical TIF In Marshall
Industrial: Schwans (numerous), MCP (ADM), Heartland (Turkey Valley Farms), US Bank, Grillworks, Bend Rite, Action Sports, Beverage Wholesalers, Runnings
Workforce Housing: Parkway Additions, Dano Addition Apartments (Taylor), Downtowner Apartment (including law office site)
Assisted Living: Hill Street Place, Heritage Pointe
Commercial Redevelopment: SuperValue, Downtown Block 11, Southwest Sanitation, Prairie Pride/N. Ambulance Facility, Memorial Park, Marshall Hotel (pending)
Aviation Business Expansion: Airpark East

7. Sources of TIF Funds TIF District No. 1-13

8. TIF Revenue Illustration
$29,156,382
Dollars Used for Project TIF Expenses
Pay 2015 $5,634,200
Pay 2016 $4,910,100
25-Year Max

9. Uses of TIF Funds TIF Project Area No.1

10. TIF Redevelopment District
Minn. Stat , subd. 9
Tax Increment Financing (TIF)
Market Street Mall TIF established for the purpose of financing “redevelopment”
Tax increment generated in a defined district area
Expenses eligible in defined project area
Delineated in the TIF plan
Approved by the HRA and City

11. TIF Redevelopment Example
OAKDALE, MN

12. TIF Redevelopment Example
Editorial: Mall site offers ample opportunity Feb 5, 2015 at 8:17 a.m.
“…Rather than shake our heads and doubt such a vision, we should all do our part in getting behind it — and collaborating where we can as community members to make it come to fruition.”
WORTHINGTON, MN

13. TIF Revenue Max term 25 years.
“Pay as You Go” developer assumes risk/returns.
April Max increment revenue $11,463,169
April Estimated max present value TIF $5,776,313

14. TIF Revenue Final Total Max increment revenue $8,797,827
Final Max present value TIF Note $4,140,837 plus interest at 4% of $3,175,598
City retains 15% administrative & redevelopment cost plus surplus $1,481,392
Initial Request was approximately $5.7M and was reduced to $4.14M based on the financials

15. Estimated TIF Eligible Costs
Description
Cost ($)
TIF Revenue Note Principal (Public utilities, site improvements, demo, etc.)
$4,140,837
TIF Revenue Note Interest 4%)
$3,175,598
Administrative & Redevelopment Expenses (15% plus surplus)
$1,481,392
Total
$8,797,827

16. Agreement Eligible TIF Expenses
Existing site parking demolition, mall structure demolition, reconstruction of north wall.
Mall related reconstruction of watermain, sanitary sewer, stormsewer, sidewalks, new parking lot, curb & gutter, security lighting.
Mall related electrical and plumbing rework.
Current tenant relocation.

17. Agreement In-Eligible TIF Expenses
No TIF (privately financed) mall interior remodeling, landscaping, site engineering, and architecture.
No TIF (privately financed and separate developer) for apartment construction, site improvements and infrastructure connection lines directly benefitting the property only.
No TIF (privately financed and separate developer) for hotel construction, site improvements and infrastructure connection lines directly benefitting the property only.

18. Developer’s Investment
Description
Costs
Mall Redevelopment
$12,928,875
Apartments
$7,111,500
Hotel
$5,676,500
TOTAL
$25,716,875*
* The proposed tax increment assistance amount of $4,140,837 is approximately 16.1% of the total project budget $25,716,875.

19. Existing Conditions

20. Existing Conditions

21. Mall Elevation Concept

22. Mall Elevation Concept

23. Mall Elevation Concept

24. Site Plan
Approximate Demo Area 65,488 sf (45% building)

25. Existing Interior View

26. Utility Plan

27. Landscaping Plan

28. Apartment Elevation Sketch

29. Apartment Elevation Sketch

30. Grandstay Hotel Sketch

31. Grandstay Hotel Example

32. Recommendations Tonight
Resolution Granting Vacation of a Portion of Peterson Street
Resolution Approving Marshall Square Addition Final Plat
Consider & Approve Ordinance Amending Chapter 86 of the City Code of Ordinances relating to Planned United Development
Adopt Planned Unit Development (PUD) Agreement
Resolution Approving Contract for Private Development
Resolution Approving Reimbursement for TIF proceeds
HRA Meeting Tonight Adopt Resolution.

33. Project Comments Cal Brink, Economic Development Director
Brian Pellowski, PBK Investments, Inc. (Market Street Mall developer).

34. Peterson Street Vacation Public Hearing
Council Initial Comment and Questions.
Public Comment:
Approach Podium to Address the Mayor and Council.
(Please Refrain From Audience Comments)
State Name and Residence Prior to Questions or Comments.
Council Continue Discussion.
Council Close Public Hearing.
Further Discussion and/or action by the City Council After Public Comment Completed.