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Jan152012

CPED Needs a New Calculator - Izzy's: Good Ice Cream, Bad Neighbor? Part 2

About the Author:  David Tinjum is a resident of the Historic Mill District of Minneapolis, Publisher of Mill City Media, and CEO of St. Paul based software company Customer FX Corporation.

*Disclaimer:  Izzy's Ice Cream is not yet a neighbor, and therefore cannot be considered a bad one, yet.

Izzy's is not the only company offering to buy the vacant lot across the street from Gold Medal Park:

In September 2010, the City issued a Request for Proposals (RFP) for redevelopment of the site for commercial, residential, industrial, or mixed-use purposes. The RFP contained an asking price of $437,850, which was based on an outside appraisal. The City received one response to the RFP from Shamrock Development, Inc. Shamrock owns the neighboring property and received final City planning approval in November 2010 to build a 150 unit residential project called Park Vista on its property. The City and Shamrock negotiated over the terms of a potential sale of 1100 2nd Street South for several months, but were unable to come to agreement on important issues such as price....(see the document embeded below)

The City's rationalization for refusing the original offer from Shamrock:

The City and Shamrock negotiated over the terms of a potential sale of 1100 2nd Street South for several months, but were unable to come to agreement on important issues such as price and development on the property. Shamrock consistently offered no more than $350,000...(see the document embeded below)

I don't need to draw on my 30 years of contract negotiation experience, or my advanced math skills, to choose the better offer (again, numbers are from the document embeded below):

Izzy’s Offer

 

Sales Price

   $437,850

*Minneapolis Taxpayer Subsidies

   $88,000

Net

   $349,850

*Not shown - $104,000 in additional Taxpayer Subsidies from the State of MN and Hennepin County

Shamrock Original Offer

 

Sales Price

   $350,000

Minneapolis Taxpayer Subsidies

   $0

Net

   $350,000

 

Shamrock’s Latest Offer

 

Sales Price

   $450,000

Minneapolis Taxpayer Subsidies

   $0

Net

   $450,000

 

Congratulations CPED, on negotiating a lower price for a City Minneapolis Taxpayer asset.  If you do enough deals like this you can assure another round of property tax increases.

The Park Vista development will not be built should the City of Minneapolis accept the lowball offer from Izzy's.  There are several factors which make building this shovel ready, City approved housing development next to a factory unfeasible, which CPED is, or should be aware of. We will discuss this in the next installment of this series.

Our Elected Officials Have an Either/Or Choice to Make

This should be easy:

  • $25,000 annual property tax revenue from Izzy's
  • $1,500,000 annual property tax revenue from the Park Vista condos

And

  • $2 million pumped into economy during construction of Izzy's
  • $60-70 million pumped into economy during construction of Park Vista

And

  • $1.2 million from Park Vista in City licensing & inspection fees for construction
  • A tiny (proportionate) amount from Izzy's

And

  • Dozens of high paying construction jobs from Izzy's
  • Hundreds of high paying construction jobs from Park Vista

And

  • Decreased property values for property near the factory
  • Increased property values for property near new luxury condos

And

  • Economic benefit to local businesses from 300+ Park Vista residents vs. a handful of part time Izzy's employees

The economic impact of these two alternatives goes much further than outlined above.  The difference in property tax revenue alone is so great, the question has to be asked:

What is Really Driving this Decision?

An exhaustive search of the public record has failed to turn up anything.  Discussions with some of those involved have not resulted in an explicit explanation.  But, listening to the tone of those involved and reading between the lines of what was said has led me to this opinion:

The City and Shamrock had a pissing contest over the initial RFP, Shamrock lost, now the City is rubbing its face in it, regardless of the best interests of Minneapolis taxpayers.

This Decision Will Result in Higher or Lower Property Taxes

This is an important issue that will have an impact on Minneapolis Taxpayers, and this neighborhood for decades to come.  Please make your voice heard, contact our elected officials.

Part 1 - Izzy's: Good Ice Cream, Bad Neighbor?

Part 2 - CPED Needs a New Calculator (this article)

To download click the downward arrow above, or go to the download page here...

-------------------------------

Please Email the Minneapolis Community Development Committee

In advance of the next meeting (see below) please email the City Council Members with a simple request: "Please vote against the Izzy's proposal".

Email Lisa Goodman, Chair at:

Lisa.Goodman@minneapolismn.gov

cc the members below:

John Quincy, Vice Chair – John.Quincy@minneapolismn.gov

Kevin Reich - Kevin.Reich@minneapolismn.gov

Robert Lilligren - Robert.Lilligren@minneapolismn.gov

Cam Gordon - Cam.Gordon@minneapolismn.gov

Don Samuels - Don.Samuels@minneapolismn.gov

info@thedmna.org (Downtown Minneapolis Neighborhood Association)

Your voice makes a difference in local policy making, please take action!

Please Attend This Important Meeting at City Hall on Tuesday 1/17/2012

A public hearing for the sale of Outlot C, 1100 2nd St S, for $437,850 to River Road Holdings, LLC, an entity affiliated with Izzy's Ice Cream (the staff recommendation), is scheduled for the next Community Development Committee meeting.

When: Tuesday, January 17, 2012 at 1:30 PM

Where: Room 317, City Hall.

The public is invited to give testimony, please do so.  

« The Week Ahead in Mill City / January 16-22 | Main | Letter to City of Minneapolis Regarding Izzy's Factory »

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