The Blaine Economic Development Authority has agreed to purchase two properties in an industrial park on the corner of Radisson Road and 105th Avenue. But for now it will allow the current business to keep leasing the properties.
The city of Blaine is paying Arkad Corporation $1.27 million for 2111 105th Ave. NE and 10525 Nassau St. NE. The combined property size is 1.61 acres. The land deal will close sometime in May, according to Erik Thorvig, Blaine’s economic development coordinator.
Thorvig said that Arkad Corporation would move out of 10525 Nassau St. NE by the end of 2017, but would continue to lease 2111 105th Ave. NE from the city until May 31, 2019, paying $475 per month.
It’s yet to be determined what will happen with these two properties in the long-term. Thorvig said they could demolish the two buildings but the city hopes to make this land part of a larger redevelopment within the industrial park on the northwest corner of 105th Avenue and Radisson Road, which is next to the National Sports Center and just down the road from Blaine City Hall.
“Prior to them leaving, we’ll have a discussion on what the future of those two buildings are,” Thorvig said.
The Blaine EDA would need to pay the property taxes while it owns these properties. Although owned by the city, the continued commercial use of the property means it is not tax exempt.
Thorvig informed the council that over this two-year period between the city buying the property and leasing it to Arkad, Blaine will lose approximately $20,000.
However, Thorvig and Blaine Planning and Community Development Director Bryan Schafer pointed out that Arkad wanted $418,000 more for the land than the city was offering.
So although Blaine will have about $20,000 in out-of-pocket expenses beyond the up-front cost of buying the property for $1.27 million, Thorvig said that city staff believed this was the best deal it could get.
“We thought that was a good trade-off,” Thorvig said.
Council Members Dick Swanson and Dave Clark said this was a good deal for the city even though the $475 monthly rent is well below market rate since it allowed the city to get the land deal done at a much lower price than the seller wanted.
“$20,000 on $1.2 million is fractional,” Clark said.
Arkad will be responsible for the utility bills, insurance premiums and any building repairs if they are necessary. Arkad also will have to pay for other contracts, including the snow removal, according to Thorvig. Arkad cannot sublease the property, he added.
At a January Blaine City Council workshop, Thorvig asked for permission to negotiate for these two properties. Beyond the general goal of facilitating redevelopment on two properties visible from 105th Avenue the city was looking at providing another option for drivers to get to a new Kwik Trip convenience store being developed on the corner lot at 105th and Radisson.
Kwik Trip had been in negotiation for the Gabrelick property in January and had said it wanted a left-in turn allowed for eastbound 105th traffic going to its gas station. This could happen today but the city has been planning on a median whenever 105th gets reconstructed.
City staff had raised concerns with the left-in for the gas station since it would be so close to the left turn lane at 105th and Radisson. They felt that a service drive between Nassau Street and this corner lot would be a safer solution long-term regardless of what development happened on that corner. That road would have gone through 10525 Nassau St. NE, which is the northern-most lot of the two properties that Blaine is purchasing from Arkad.
This extra turning movement would allow Kwik Trip to more easily capture both the eastbound and westbound traffic on this city road that gets approximately 9,500 vehicles per day.
The council ultimately said it could add the extra left turn lane in as an option, but the final design of 105th Avenue is still being discussed with two new council members having come on since the council approved the 105th Avenue design in 2015.
“We’ll have that conversation again with Kwik Trip and then let the council make the decision as to what the future of that northerly property is,” Thorvig said.