Herald Journal - Enterprise Dispatch - Delano Herald Journal
Developing Delano: Council hears draft feasibility report on northwest industrial park
June 7, 2010

By Ryan Gueningsman
Managing Editor

DELANO, MN – A draft feasibility report on the creation of a second industrial park, located northwest of town, was presented to the Delano City Council Tuesday night.

In February, the city council gave its approval for city staff to move ahead with a feasibility study for the creation of an industrial park.

The city’s 2002 comprehensive plan identified a large area northwest of the city’s current border for future industrial growth, according to the draft report. The city has had some preliminary interests from businesses looking for new development sites.

This report looks at things like development potential, infrastructure costs, and preparing a “phased” approach to the development of a proposed industrial park, according to a memo to the city council from City Administrator Phil Kern.

City Engineer Vince Vander Top of Wenck Associates presented what would be the most logical phases of installing infrastructure to the area, and the steps needing to take place to get to that point.

According to the draft feasibility report, there are two property owners involved in development of the industrial park – the Moonens and the Murphys.

Phase one of the proposed project includes the northern portion of the site (Moonen property). Phase one work would include:

• A turn and bypass lane on Highway 12 at the intersection of Davidson Avenue.

• Overall site and street grading of the Moonen property, right of way on Davidson and a small portion along “Street B” in the Murphy property.

• Utilities installation including storm sewer, sanitary sewer, and water main.

• Street construction.

• Site restoration.

Phase one has a price tag of $4,158,000. It was noted some county ditch 34 improvements are included in these costs.

Phase two of the project includes the southern portion of the site (Murphy property). Phase two would include:

• Overall site and street grading of the Murphy property.

• Utilities installation including storm sewer, sanitary sewer, and water main.

• Street construction.

• Site restoration.

Phase two has a price tag of $4,739,000. This phase is larger acre-wise, which accounts for the higher cost.

Vander Top presented an assessment schedule that could be used for the costs of the utility and infrastructure improvements. The report shows how to allocate the associated costs of improving the property to those who will benefit from the improvements.

“As much as possible, we’d like new development to pay for itself,” Kern said following the meeting. “That’s been the city’s practice for decades.”

He said, looking at the existing industrial park, the city fronted the investment to put in infrastructure, but was then paid back via assessments against the properties.

Following the meeting, Kern said there presently are not any entities privately or publicly that are willing to be responsible for the assessments/improvements without a user in hand that will be developing the park.

“None of them want to take on that risk without having a revenue stream on the other end,” Kern said.

This means that the city is working with the two property owners to ensure there is the best package in place so that everybody understands the terms of the deal and can work together to get something going, Kern said.

“The structure would then be in place to know who pays for what and how development happens,” Kern added.

He said the assessments would range anywhere from $1.60 per square foot of land to around $3 per square foot, depending on the location.

The next steps, Kern said, are to take the information in the draft report and begin to formulate development agreements with the property owners.

Continuing to determine property valuations and assessment amounts, exploring other funding sources, determining a project schedule, and water quality and wetland mitigation concerns are also ongoing issues.

“When someone is able to come to town or expand in town, we’ll be ready to go and move quickly with them,” Kern said, adding the city has had several industries in the past five months come to Delano.

“We’ve sat down with them, taken them to sites and shown them around,” Kern said. “A number of them are considering or thinking about Delano in their long range plans. We’re trying to get ready so if one of those entities work out, then we can move forward.”

Easements for project
An easement will be required for the realignment of 72nd Street. There is no cost included in the study for the acquisition of this easement.

There is an existing easement along the east side of the Murphy property that will no longer be needed, according to the report. Therefore, an exchange may be proposed to obtain the 72nd Street easement. There are no revenues assumed for the vacation of this easement.

Future improvements of the intersection of Highway 12 and Davidson Avenue may require additional right-of-way/easements.

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