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EDA previews buyback and resale of industrial outlot; board hears tax-abatement and proceeds details
Summary
EDA staff informed board members Feb. 4 about plans to repurchase a small outlot previously sold during the pandemic and to subdivide and resell it to new industrial tenants; staff said the transaction would return funds to the EDA real-estate fund after repurchasing the parcel from the current owner.
At the Feb. 4 Economic Development Authority meeting, staff briefed the board about a proposed repurchase and resale of an outlot adjacent to the recently developed Journey building.
Staff described the site as a contaminated outlot that the city sold earlier and that currently sits north of the Journey development. The current owner (identified in the presentation as a real-estate entity associated with the Journey developer) has no present use for the outlot and is willing to convey the parcel back to the EDA so the authority may subdivide and market it to smaller industrial tenants.
Staff said the original sale price to the developer was low — about $3 per square foot at the time of sale — and that the EDA would repurchase the parcel for that same agreed price. The projected resale value discussed in the briefing was about $170,000 per acre, producing an estimated net difference (after repurchase) that would be deposited into the EDA real-estate fund. Staff estimated the difference would be on the order of approximately $100,000 after accounting for the buy-back and resale.
Board members asked about property-tax abatement terms tied to the Journey project and whether the repurchase and resale would affect existing abatements. Staff said the Journey building had a nine-year property-tax abatement and that the outlot under discussion carries little assessed value relative to the building, so the abatement would be largely unaffected. Members also asked about prospective tenants and whether the market could absorb smaller industrial spaces; staff said there is tenant interest for smaller units that are hard to source in Shakopee.
No formal action was taken; staff said they planned to return with a formal contract when details were finalized. The item was informational, and the board directed staff to proceed with further contract work before bringing a formal sales agreement back for approval.
