Project is more than 6 years in the making
Delano’s older industrial park south of Highway 12 is largely full, and businesses do not have opportunities to expand.
For this reason the city of Delano, businesses, property owners, a developer and Wright County all have been plugging away at creating a solution — a new business park on the northwest side of town.
Estimated costs for land, infrastructure and debt service are over $12 million.
Lots of time and effort have gone into getting the Northwest Business Park to the point where it is almost off the drawing boards. For example, it took five years for the city of Delano to get Wright County’s approval for channeling storm water drainage into County Ditch 34. Now the approval process is speeding up and grading could begin in late spring.
The Delano City Council Tuesday, Jan. 8, reviewed three key documents pertaining to the Northwest Business Park, which is being planned for the area between 72nd Street and Davidson Avenue on the south and Highway 12 on the north. The documents are the feasibility report, a draft of the development agreement and a petition from the owners of the Murphy property for annexing the land into the city of Delano.
First the council opened the public hearing on the feasibility report and continued the hearing to the Jan. 15 City Council meeting. Because of this action, the council had to delay decisions on the development agreement. After receiving the Murphy petition, City Councilors scheduled a public hearing on the proposed annexation for Tuesday, Feb. 19.
City Administrator Phil Kern emphasized the fact that the Northwest Business Park is a private sector endeavor. The city of Delano is facilitating the effort by arranging for construction of infrastructure, such as roads and utilities. Public improvements are only one part of a global deal amongst the city of Delano, the Delano Economic Development Authority, Delano Industrial Partners I LLC and West Edge Properties LLC.
Delano Industrial Partners and West Edge propose to integrate the parcel on the north end of the proposed development, known as the Moonen property, with property on the southern end owned by Kenneth H. and Penni Murphy. Once the development agreement is approved, Delano can prepare plans and specifications for public improvements. The current time line calls for construction to start in May/ June for Project I (the first of two projects) with substantial completion anticipated this fall and final completion anticipated in summer 2014.
Randy’s Environmental Services is expected to be the first tenant in the Northwest Business Park, City Administrator Kern said. Randy’s would occupy eight acres and generate $1 million in tax increment financing (TIF) money.
City Engineer Vince VanderTop said the cost of public improvements would be assessed to benefiting properties located within the business park. Project I would be located on the east side of the business park and span the area between 72nd Street and Highway 12. Total estimated costs for Project I improvements are $6,896,350, including construction costs for sanitary sewers, water mains, storm sewers, grading, streets, related improvements on Highway 12 and improvements to Ditch 34. Land costs and bond interest also are part of the $6.9 million. Financing would come via 20 year bonds.
One of the Project I improvements would be a portion of a collector road beginning at Highway 12 on the north and running south through the development. Eventually the road would reach 72nd Street and Davidson Avenue. Project II would involve construction of the remainder of the collector road, along with four side streets. Because the developer does not have all of the lots and tenants defined, the side streets are likely to be moved, VanderTop said.
Land costs and bond interest for Project II improvements have not been determined, he said. Without these figures, estimated Project II costs amount to $4,811,862.
Some additional approvals will be necessary before the Northwest Business Park can take physical form. The Minnesota Department of Transportation must okay Highway 12 intersection improvements. Both the state and the city of Delano must approve the annexation of the Murphy property from Franklin Township into the city of Delano. Once the annexation has been approved, the Murphys can sell their property to the development group. If the business park is not constructed, the Murphy property can be split from the city and returned to Franklin Township.
City Administrator Kern said the development group would take the financial risks for the Northwest Business Park public improvements. The developers would be responsible for marketing the property and finding tenants. If the developers cannot find a sufficient number of tenants, they would lose the property because of the special assessments.
Meanwhile, Delano can help the developers with special assessments costs by setting up tax abatements or tax increment financing for the first 40 acres, Kern said. A $1.63 million grant from the state of Minnesota for job creation would give the developers a head start on paying the special assessments.
OTHER CITY COUNCIL ACTIONS
The City Council also:
WATCHED as City Clerk Marlene Kittock gave oaths of office to City Councilors Jack Russek and Betsy Stolfa.
APPROVED Delano’s 2030 Comprehensive Plan.
APPROVED the hiring of attendants for the warming house for the outdoor ice skating rink located at Delano Elementary School, next to the hockey rink. The warming house is open from 5 to 9 p.m. weekdays and 2 to 10 p.m. Saturdays and Sundays .
Contact Susan Van Cleaf at [email protected]