HomeMy WebLinkAbout[07a] CBD Alley Improvement Project
Council Agenda Item 7a
MEETING DATE: May 1, 2017
AGENDA ITEM: CBD Alley Improvement Project
SUBMITTED BY: Administration/Engineering
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: N/A
PREVIOUS COUNCIL ACTION: The City Council ordered the improvements for the improvements to
the north/south east/west alleys in Block 9 and Block 12 of the central business district. Approval included the
letting and receiving of bids for the same.
BACKGROUND INFORMATION: The improvements for the CBD Alley project include the assignment of
assessments. As in the past the City Council will be conducting the assessment hearing before the contract is
awarded and the improvements are completed.
In preparing the assessment roll, the City Assessment policy is reviewed as the starting point. In addition, a benefit
analysis is prepared by an independent appraiser to provide the benefit of the proposed improvement. In the matter
of the CBD Alley Improvements, the policy identifies the starting point for assessing alley improvements is 100%
with utilities assessed at 60%. The following proposed assessment roll includes a column entitled “Sub Total
Assessment”.
The attachment that follows is the benefit report as prepared by Bill Waytas, the same appraiser used for Park
Terrace and the 2015 Street Improvement. Since the purpose of the report is to indicate the benefit to the property,
part of the review includes the existing conditions. The project includes two blocks that are referred to as Block 9
and Block 12. Since Block 9 has existing bituminous surfacing the benefit is less than the benefit to Block 12 which
is gravel surface. The benefit is different if there is direct versus indirect access to the roadway. If there is a
significant physical barrier that would prevent access, the property was assigned the value of indirect. The final
stndrd
distinction is homestead versus non homestead. In 2002 when the City improved the streets (Ash/Birch/1/2/3 )
the same method was used, charging different amounts for residential and commercial, using the tax classification.
The benefit values as indicated in the report are illustrated in the upper right of the assessment roll.
The benefit analysis was applied the same manner as it was for the Park Terrace and 2015 Street Improvement
Project, using the high end of the value indicated in the report as the cap for the improvement. The column entitled
“City Subsidy” is the difference between the assessment policy and the benefit analysis. The Park Terrace
Improvement included storm sewer and that was included as part of the benefit analysis in the cap, the same as it is
applied in this case.
The next step in the process is to consider two resolutions: 1) Declaring the costs to be assessed; and 2) Calling for
hearing on the proposed improvements. Staff is recommending conducting the hearing on May 15 at 6:30 PM. As
th
in the past, the bids can be awarded after the assessment hearing. The project is anticipated to begin after the 4 of
July.
Upon execution of the two resolutions, property owners will be mailed notices of the upcoming hearing with their
proposed assessment. In addition, the hearing notice will be placed in the Newsleader as a legal ad.
ATTACHMENTS: Resolution 2017-017 Declaring Cost to be assessed
Resolution 2017-018 calling for a Hearing on Proposed Assessments
Benefit Analysis
Final Assessment Roll
REQUESTED COUNCIL ACTION: Authorize the Mayor and Administrator to execute Resolution 2017
Declaring cost to be assessed and Resolution 2017-018 calling for a Hearing on the Proposed Assessments.
Resolution 2017-017
Declaring Costs to be Assessed and Ordering Preparation
of Proposed Assessment
2017 CBD Alley Improvement
WHEREAS, the City has solicited and opened bids for the improvement of the following
areas: the east/west and north/south alleys between Minnesota Street and Birch Street and
st
College Avenue N and 1 Ave NW by bituminous surfacing, storm water and sewer
improvements.
The estimated cost for such improvement is $239,693.00, and the expenses incurred or to
be incurred in the making of such improvement amount to $121,507.00 so that the total
cost of the improvement will be $361,200.00.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF ST. JOSEPH,
MINNESOTA:
1. The portion of the cost of such improvement to be paid by the city is hereby
declared to be $210,621.00 and the portion of the cost to be assessed against
benefited property owners is declared to be $150,579.00.
2. Assessments shall be payable in equal annual installments extending over a period
of 10 years, the first of the installments to be payable on or before the first Monday
in January 2018, and shall bear interest at the rate of 6.0 percent per annum from
the date of the adoption of the assessment resolution.
3. The City Administrator, with the assistance of the City Engineer, shall forthwith
calculate the proper amount to be specially assessed for such improvement against
every assessable lot, piece or parcel of land within the district affected, without
regard to cash valuation, as provided by law, and she shall file a copy of such
proposed assessment in her office for public inspection.
4. The City Administrator shall upon the completion of such proposed assessment,
notify the council thereof.
Adopted by the Council this 1st day of May, 2017.
____________________________
Rick Schultz, Mayor
____________________________
Judy Weyrens, Administrator
Resolution 2017-018
Hearing on Proposed Assessment
2017 CBD Alley Improvements
WHEREAS, by a resolution passed by the council on May 1, 2017, the City Administrator
was directed to prepare a proposed assessment of the cost on the 2017 CBD Alley
Improvements which affects the following areas: the east/west and north/south alleys
st
between Minnesota Street and Birch Street and College Avenue N and 1 Ave NW by
bituminous surfacing, storm water and sewer improvements.
AND WHEREAS, the City Administrator has notified the council that such proposed
assessment has been completed and filed in his/her office for public inspection,
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF ST. JOSEPH,
MINNESOTA:
1. A hearing shall be held on the 15th day of May, 2017 in the St. Joseph Government
Center located at 75 Callaway St E, St. Joseph, MN at 6:30 PM to pass upon such
proposed assessment and at such time and place all persons owning property
affected by such improvement will be given an opportunity to be heard with
reference to such assessment.
2. The City Administrator is hereby directed to cause a notice of the hearing on the
proposed assessment to be published once in the official newspaper at least two
weeks prior to the hearing, and she shall state in the notice the total cost of the
improvement. She also cause mailed notice to be given to the owner of each parcel
described in the assessment roll not less than two weeks prior to the hearings.
3. The owner of any property so assessed may, at any time prior to certification of the
assessment to the county auditor, pay the whole of the assessment on such property,
with interest accrued to the date of payment, to the date of payment, except that no
interest shall be charged if the entire assessment is paid within 30 days from the
adoption of the assessment. An owner may at any time thereafter, pay to the City
Administrator the entire amount of the assessment remaining unpaid, with interest
accrued to December 31 of the year in which such payment is made. Such payment
must be made before November 15 or interest will be charged through December
31 of the succeeding year.
Adopted by the Council this 1st day of May, 2017.
__________________________
Judy Weyrens, Administrator Rick Schultz, Mayor
Report Type
Real Estate Consulting
Letter Report
Effective Date
March 2, 2017
Client Subject Property
City of St. Joseph
Alley Improvement Project
Attn: Susan Kadlec, City Attorney Blocks 9 and 12 Alleys
1010 West St. Germain, #420 St. Joseph, MN 56374
St. Cloud, MN 56301
Prepared By:
Ethan Waytas, Appraiser
William R. Waytas, Appraiser
File # V1702001
Nagell Appraisal Incorporated
12805 Highway 55, Suite 300
Plymouth, Minnesota 55441
Tel: 952.544.8966 | Fax: 952.544.8969
AREA DESCRIPTION
St. Joseph is located about 10 minutes west of St. Cloud along Highway 75 and I-94. The population
was 6,534 as of the 2010 census (an increase of 39.6% from the 2000 census). The College of St.
colleges in town and nearby provide a boost to the local economy with the influx of students every year.
Single family homes generally range in value between $50,000 and $200,000+ in the City Limits with an
average of about $180,000 (MLS statistics). The city is mostly built-up, however the city is expanding as
it annexes land as the population increases. Most homes are average to good quality.
SUBJECT PROPERTIES
The project area is a mixture of commercial and residential homes. The residential homes are
commercially zoned and guided for future commercial use. Per city information, there are a total of 22
properties in the project area with adjoining frontage on the alleys.
EXISTING ALLEYS
Physical Condition of the Existing Road:
Block 9:
The existing alley road improvements are showing significant signs of wear and reported to be in
poor condition (per feasibility study). The pavement was reportedly, per city, last constructed in
1998. There is severe alligator cracking and potholes.
The feasibility study indicated that there is poor surface water flow and areas of standing water.
Block 12:
A majority of the alley is gravel, but there is some paved area as well. The gravel portion has
many potholes and is very dated. The paved area has significant cracking (per feasibility study).
The feasibility study indicated that there is poor surface water flow and areas of standing water.
Functional Design of the Road: The existing street improvements have a poor look in the
front/side/rear of a majority of properties in the project
The current roads meet the minimum expectations for accessibility but reflect negatively on the visual
appeal of the properties. Overall, the existing street improvements are considered to be in poor surface
condition, look dated and reflect likewise on the adjoining properties. Additionally, the aging utility
infrastructure will begin to cause service delays. Clearly, a full alley reconstruction is needed now or will
be in the very near future.
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PROPOSED IMPROVEMENTS
The current alley system, as noted, is in poor surface condition and has areas of poor drainage.
Proposed Improvements Block 9:
The project is proposed to replace the road base and asphalt with a new road base and asphalt.
Sanitary sewer lining, storm sewer catch basins will be constructed to improve water drainage
and management.
Proposed Improvements Block 12:
The existing gravel and partial pavement would be replaced with new asphalt pavement. The
Sanitary sewer lining, storm sewer catch basins will be constructed to improve water drainage
and management.
A full reconstruction is appropriate when the road base and alley surface are in poor condition and the
existing water management is poor.
If any of the above descriptions change, the benefit due to the project could differ.
HIGHEST AND BEST USE
The subject project area is located near the central portion of the city in the downtown area.
Owners in the subject area appear to update their property as needed when site and building
components wear out or become dated. Therefore, it is logical to update the alley to the subject
properties as needed as these are essential property characteristics that are expected in this market.
An informed buyer would consider the condition of the alley, alley bed, and drainage infrastructure. A
well constructed and good condition road or alley provides aesthetic appeal to a property. Given a
choice, a potential informed buyer would likely prefer a newer alley and drainage infrastructure over a
deteriorating road and poor water management.
Note: The alley system is used by almost all of the adjoining properties for access, deliveries, parking,
etc. The alley effectively functions as a road for many of the properties.
If replacement of components of real estate near the end of their economic life in a home or building is
postponed, it can be more costly in the long run; delays in replacing components can result in incurring
higher interim maintenance costs and potential difficulty in marketing the property. Also, it is typical for
the cost of the replacement of an improvement to increase over time. That said it is logical and prudent
for market participants to update/replace dated components when needed. Therefore, the highest and
best use of the surrounding properties in the project area is for the continued residential use with the
proposed infrastructure improvements.
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DISCUSSION OF MARKET BENEFIT BLOCK 9
Listed below are the factors that will be taken into consideration concerning the potential benefit to the
properties.
Description Existing Improvements Change
1) Alley Surface Poor, asphalt New
2) Base Condition Poor New
3) Curb
None None
4) Drainage Poor Improved
5) Storm Sewer Limited Installed as Needed
6) City water
Public, n/a Public, n/a
7) City sewer Needs Liner Re-lining it
8) Sidewalk None None
9) Street Lights Average Average
10) Functional Design of Alley Poor Good
11) Traffic Management N/A N/A
12) Median
N/A N/A
13) Alley Proximity to Properties
N/A N/A
14) Visual Impact on Properties Poor Good
Based on the preceding grid, the subject properties will improve in 7 of the 10 applicable categories (N/A
excluded). Market participants generally recognize that streets (alleys) and storm sewer (water
management) need replacing when nearing the end of a long economic life. A typical buyer in the
subject market commonly prefers a new road and good water management versus dated, older road and
poor water management. In addition to visual benefit, new street improvements provide better and safer
use for pedestrians (biking, walking, stroller, rollerblading, etc.) and drivers. The new alley and storm
sewer will enhance potential for updating the current properties. Properties that directly abut or have
driveways that exit on the new alley will benefit.
Note: Many of the properties use the alley for access to the property, deliveries, and parking. The alley
is an integral component to the function and utility of the adjoining properties.
Based on past appraisals, experience, and general market information, it is not uncommon for properties
similar to those in the subject market to realize an increase in price for new street improvements.
Given the scope of the project and the age/quality/condition of houses, properties in the area with
updated alleys and improved sanitary sewer lining and water management could see a price benefit of:
Homestead (direct access) $30 to $50 per linear foot of alley
Homestead (indirect access) $20 to $40 per linear foot of alley
Non Homestead (direct access) $40 to $60 per linear foot of alley
Non Homestead (indirect access) $30 to $50 per linear foot of alley
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DISCUSSION OF MARKET BENEFIT BLOCK 12
Listed below are the factors that will be taken into consideration concerning the potential benefit to the
properties.
Description Existing Improvements Change
1) Alley Surface Gravel, partial paved, poor New
2) Base Condition Poor New
3) Curb None None
4) Drainage Poor Improved
5) Storm Sewer Limited Installed as Needed
6) City water
Public, n/a Public, n/a
7) City sewer Needs Liner Re-lining it
8) Sidewalk None None
9) Street Lights Average Average
10) Functional Design of Alley Poor Good
11) Traffic Management N/A N/A
12) Median N/A N/A
13) Alley Proximity to Properties N/A N/A
14) Visual Impact on Properties Poor Good
Based on the preceding grid, the subject properties will improve in 7 of the 10 applicable categories (N/A
excluded). Market participants generally recognize that streets (alleys) and storm sewer (water
management) need replacing when nearing the end of a long economic life. A typical buyer in the
subject market commonly prefers a new road and good water management versus dated, older road and
poor water management. In addition to visual benefit, new street improvements provide better and safer
use for pedestrians (biking, walking, stroller, rollerblading, etc.) and drivers. The new alley and storm
sewer will enhance potential for updating the current properties. Properties that directly abut or have
driveways that exit on the new alley will benefit.
Note: Many of the properties use the alley for access to the property, deliveries, and parking. The alley
is an integral component to the function and utility of the adjoining properties.
Based on past appraisals, experience, and general market information, it is not uncommon for properties
similar to those in the subject market to realize an increase in price for new street improvements.
Given the scope of the project and the age/quality/condition of houses, properties in the area with
updated alleys and improved sanitary sewer lining and water management could see a price benefit of:
Homestead (direct access) $40 to $60 per linear foot of alley
Homestead (indirect access) $30 to $50 per linear foot of alley
Non Homestead (direct access) $50 to $70 per linear foot of alley
Non Homestead (indirect access) $40 to $60 per linear foot of alley
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CONCLUSION
The benefit amount noted above should not be construed or relied on as being an appraisal, but
are general observations based on the overall market. If an appraisal were made on the individual
properties, the actual benefit amount could vary from market observations above.
If you have additional questions, please do not hesitate to contact us.
Sincerely,
Ethan Waytas William R. Waytas
Certified General MN 40368613 Certified General MN 4000813
The project area was viewed by William R. Waytas.
Enclosures: Location Map, Aerial Map View of Project, Subject Photos, Qualifications, Engagement
Letter
__________________________________________________________________________
www.nagellmn.com
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LOCATION MAP
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AERIAL VIEW OF PROJECT MAP
Block 12 Project
Block 9 Project
*Yellow line reflects project area (approximate)
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SUBJECT PHOTOGRAPHS
Block 9 view Block 9 view
Block 9 view Block 9 view
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Subject Photographs continued
Block 9 view Block 9 view
Block 9 view Block 9 view
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Subject Photographs continued
Block 12 view Block 12 view
Block 12 view Block 12 view
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Subject Photographs continued
Block 12 view Block 12 view
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QUALIFICATIONS
Appraisal Experience
Presently and since 2006, Ethan Waytas has been employed as an employee of Nagell Appraisal
Incorporated, an independent appraisal firm (12 employees) who annually prepare 1,500 +/- appraisal
reports of all types. He is currently a full time licensed certified general real estate appraiser, as well as
the director of
Properties appraised:
Commercial - low and high-density multi-family, retail, office, industrial, restaurant, church, strip-
mall, fast-food, convenience stores, auto-service and repair, cinema, numerous special use
properties, and subdivision analysis.
Residential single-family residences, hobby farms, lakeshore, condominiums, townhouses,
REO and land.
Eminent Domain extensive partial and total acquisition appraisal services provided to
numerous governmental agencies and private owners.
Special Assessment numerous street improvement and utilities projects for both
governmental and private owners.
Clients - served include banks, savings and loan associations, trust companies, corporations,
governmental bodies, relocation companies, attorneys, REO companies, accountants and
private individuals.
Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically
an hour from downtown metro). Numerous assignments throughout Minnesota.
Professional Membership, Associations & Affiliations
License: Certified General Real Property Appraiser, MN License #40368613
Education
-- Graduate of the University of Minnesota: College of Science and Engineering, Twin Cities
Campus
Bachelor of Science in Computer Science, with distinction, 3.86 GPA.
-- General & Professional Practice Courses & Seminars
-- Basic Appraisal Procedures
-- Basic Appraisal Principles
-- 2012-2013 15-Hour National Uniform Standards of Professional Appraisal Practice
-- General Appraiser Sales Comparison Approach
-- General Appraiser Income Approach Part 1
-- General Appraiser Income Approach Part 2
-- Advanced Income Capitalization
-- General Appraiser Report Writing and Case Studies
-- Real Estate Finance, Statistics and Valuation Modeling
-- 2014-2015 7-hour National USPAP Update Course
-- General Appraiser Site Valuation & Cost Approach
-- Advanced Market Analysis and Highest & Best Use
-- Advanced Concepts & Case Studies
-- Quantitative Analysis
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Curriculum Vitae -- continued
Appraisal Experience
Presently and since 1985, William R. Waytas has been employed as a full time real estate appraiser.
Currently a partner and President of the Nagell Appraisal & Consulting, an independent appraisal firm
(12 employees) who annually prepare 1,500 +/- appraisal reports of all types. Mr. Waytas was employed
with Iver C. Johnson & Company, Ltd., Phoenix, AZ from 1985 to 1987.
Properties appraised:
Commercial - low and high-density multi-family, retail, office, industrial, restaurant, church, strip-
mall, fast-food, convenience stores, auto-service and repair, hotel, hotel water park, bed &
breakfast, cinema, marina, numerous special use properties, and subdivision analysis.
Residential single-family residences, hobby farms, lakeshore, condominiums, townhouses,
REO and land.
Eminent Domain extensive partial and total acquisition appraisal services provided to
numerous governmental agencies and private owners.
Special Assessment numerous street improvement and utilities projects for both
governmental and private owners.
Review residential, commercial and land development.
Clients - served include banks, savings and loan associations, trust companies, corporations,
governmental bodies, relocation companies, attorneys, REO companies, accountants and
private individuals.
Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically
an hour from downtown metro). Numerous assignments throughout Minnesota.
Professional Membership, Associations & Affiliations
License: Certified General Real Property Appraiser, MN License #4000813.
Appraisal Institute: SRA, Senior Residential Appraiser Designation,
General Associate Member
Employee Relocation Council: CRP Certified Relocation Professional Designation.
International Right-Of-Way Association: Member
HUD/FHA: On Lender Selection Roster and Review Appraiser
DNR: Approved appraiser for Department of Natural Resources
Testimony
-- Court, deposition, commission, arbitration & administrative testimony given.
Mediator
-- Court appointed in Wright County.
Committees
-- President of Metro/Minnesota Chapter, 2002, Appraisal Institute.
-- Chairman of Residential Admissions, Metro/MN Chapter, AI.
-- Chairman Residential Candidate Guidance, Metro/Minnesota Chapter, AI.
-- Elm Creek Watershed Commission, Medina representative 3 years.
-- Medina Park Commission, 3 years.
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Curriculum Vitae -- continued
Education
-- Graduate of Bemidji State University, Minnesota. B.S. degree in Bus. Ad.
-- During college, summer employment in building trades (residential and commercial).
-- Graduate of Cecil Lawter Real Estate School. Past Arizona Real Estate License.
-- General & Professional Practice Courses & Seminars
-- Course 101-Introduction to Appraising Real Property.
-- Numerous Standards of Professional Practice Seminar.
-- Fair Lending Seminar.
-- Eminent Domain & Condemnation Appraising.
-- Eminent Domain (An In-Depth Analysis)
-- Property Tax Appeal
-- Eminent Domain
-- Business Practices and Ethics
-- Scope of Work
-- Construction Disturbances and Temporary Loss of Going Concern
-- Uniform Standards for Federal Land Acquisitions (Yellow Book Seminar)
-- Partial Interest Valuation Divided (conservation easements, historic preservation easements, life
estates, subsurface rights, access easements, air rights, water rights, transferable development
rights)
Commercial/Industrial/Subdivision Courses & Seminars
-- Capitalization Theory & Techniques
-- Highest & Best Use Seminar
-- General & Residential State Certification Review Seminar
-- Subdivision Analysis Seminar.
-- Narrative Report Writing Seminar (general)
-- Advanced Income Capitalization Seminar
-- Advanced Industrial Valuation
-- Appraisal of Local Retail Properties
-- Appraising Convenience Stores
-- Analyzing Distressed Real Estate
-- Evaluating Commercial Construction
-- Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets
Residential Courses & Seminars
-- Course 102-Applied Residential Appraising
-- Narrative Report Writing Seminar (residential)
-- HUD Training session local office for FHA appraisals
-- Familiar with HUD Handbook 4150.1 REV-1 & other material from local FHA office.
-- Appraiser/Underwriter FHA Training
-- Residential Property Construction and Inspection
-- Numerous other continuing education seminars for state licensing & AI
Speaking Engagements
-- Bankers
-- Auditors
-- Assessors
-- Relocation (Panel Discussion)
Publications
-- Real Estate Appraisal Practice (book): Acknowledgement
-- Articles for Finance & Commerce and Minnesota Real Estate Journal
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ENGAGEMENT LETTTER
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