Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
2017-04-13 Council Agenda Packet
CITY OF CORCORAN *Includes Materials - Materials relating to these agenda items can be found in the House Agenda Packet by Door. +The Market Study Executive Summary was provided in the printed packet the complete study can be found in the electronic packet available on the website at www.ci.corcoran.mn.us. Corcoran City Council Agenda April 13, 2017 - 7:00pm 1.Call to Order / Roll Call 2.Pledge of Allegiance 3.Agenda Approval 4.Open Forum 5.Presentations a.Years of Service Recognition – Jesse Olson (10 Years) b.Years of Service Recognition – Duane Hochstetler (10 Years) c.Annual Fire Department Reports i.Loretto Fire Department ii.Hanover Fire Department* iii.Rogers Fire Department* 6.Consent Agenda a.Draft Minutes of March 16, 2017 Joint Council and Commission Work Session* b.Draft Minutes of March 23, 2017 Council Meeting* c.Part-time/Seasonal Wage Scale Amendment* d.Lien Release Request* 7.Claims as Presented a.Escrow Claims (Fund #500)* b.All Other Financial Claims* 8.Staff Reports / Memos / Commissions a.Commission Representatives* 9.Planning Business 10.Unfinished Business a.Assessment Policy Approval* 11.New Business a.Corcoran Southeast District Market Analysis*+ b.Address Specific Crime/Drug Issues to Retain Safe Atmosphere* c.Extension to Roehlke Purchase Agreement* 12.2017 Council Schedule* 13.Council Liaison Calendar Planning Commission 4/6/17 5/4/17 6/1/17 7/6/17 8/3/17 LaFave Keefe Thomas Bottema Dejewski Parks and Trails Commission 4/18/17 5/16/17 6/20/17 7/18/17 8/15/17 Keefe Dejewski LaFave Keefe Available 14.Adjournment CITY OF CORCORAN *Includes Materials - Materials relating to these agenda items can be found in the House Agenda Packet by Door. +The Market Study Executive Summary was provided in the printed packet the complete study can be found in the electronic packet available on the website at www.ci.co rcoran.mn.us. Corcoran City Council Agenda April 13, 2017 - 7:00pm 1. Call to Order / Roll Call 2. Pledge of Allegiance Motion to appoint Councilmember LaFave as Acting Mayor for April 13, 2017 meeting 3. Agenda Approval 4. Open Forum 5. Presentations a. Years of Service Recognition – Jesse Olson (10 Years) Remove from agenda b. Years of Service Recognition – Duane Hochstetler (10 Years) c. Annual Fire Department Reports i. Loretto Fire Department - Jeff Leuer ii. Hanover Fire Department* - Dave Malewicki iii. Rogers Fire Department* - Brad Feist 6. Consent Agenda a. Draft Minutes of March 16, 2017 Joint Council and Commission Work Session* b. Draft Minutes of March 23, 2017 Council Meeting* c. Part-time/Seasonal Wage Scale Amendment* d. Lien Release Request* 7. Claims as Presented a. Escrow Claims (Fund #500)* b. All Other Financial Claims* 8. Staff Reports / Memos / Commissions a. Commission Representatives* 9. Planning Business 10. Unfinished Business a. Assessment Policy Approval* 11. New Business a. Special Event Request – Stanchion Bar b. Corcoran Southeast District Market Analysis*+ c. Address Specific Crime/Drug Issues to Retain Safe Atmosphere* d. Extension to Roehlke Purchase Agreement* e. Awarding Asphalt and Seal Coat Contracts f. Joint Powers Agreement – St. Cloud State University 12. 2017 Council Schedule* 13. Council Liaison Calendar Planning Commission 4/6/17 5/4/17 6/1/17 7/6/17 8/3/17 LaFave Keefe Thomas Bottema Dejewski Parks and Trails Commission 4/18/17 5/16/17 6/20/17 7/18/17 8/15/17 Keefe Dejewski LaFave Keefe Available 14. Adjournment r �4 JL CITY OF CORCORAN 8200 County Road 116, Corcoran, MN 55340 763 - 420 -2288 www.ci.corcoran.mn.us Date: / / Open Forum: Yes or No Meeting Rules of Conduct: y u are not s d el o I speak at Open Forurn Name of Speaker: • Fill out and turn In White comment (PL E INT EARL YT- card to a staffinember. Related to Agenda Ite Yes or o Agenda Item Number: • When called upon, approach podium and state name and address. Are you speaking or the item against the item not applicable • Indicate Ifrepresenting a group. • Llmlt remarks to 3 -5 minutes. '.. ZI Telephone (optional): J PUBLIC COMMENT CARD Representing: Address: Comments: Please Approach the Podium to Spear When Called Upon 5b. Dear Ladies and Gentlemen, As Fire Chief for the Rogers Fire Department, I proudly present to you this summary of activities for the year 2016. 2016 Call History: The Rogers Fire Department responded to 482 calls for emergency and non-emergency assistance. There were 113 medical calls and 369 calls for Fire/P.I. Accidents/Calls for service. Fire Contract: The 2017 Rogers Fire Department service contract rate for the City of Corcoran will remain the same as the current contract on file from 1994. The contract amount is calculated by multiplying the 2016 Market Value times .00044. Based on the current rate, the 2017 Fire Contract for the City of Corcoran will be $105,432. Training: In 2016, Rogers Firefighters participated in approximately 1600 hours of training activities. Firefighters trained on structure fire response, fire pumps, forcible entry, auto & bus extrication, ice rescue, confined space, hazardous materials, active shooter, and other emergency related training activities throughout the year. 2017 Budget: Description Budget Description Budget Payroll, Health Insurance, Workers Comp $359451 Fire Prevention $3450 Office Supplies $1700 Communication $45500 Computer Supplies/Equipment $9300 Printing $1150 Training Supplies $750 Insurance $18900 Operation Supplies $10000 Electric $6000 Tools/Equipment $50500 Water $200 Protective Gear $22000 Gas $3500 Fuel/Lubricants $8400 Refuse Disposal $300 Medical Supplies $2200 Sewer $50 Clothing $5500 Security System $425 Legal Fees $1000 Building Repairs $13000 Contracted Services $1500 Vehicle Repairs $20000 Computer Services $6900 Cleaning Service $3250 Telephone $1062 Testing $12500 Vehicle/Equipment Parts $4000 Equipment Leases $1644 Dues/Subscriptions $3250 Training/Conferences $18750 Emergency Management $17300 Rogers Fire Department 21201 Memorial Drive Rogers, MN 55374 Phone: 763-428-3500 Fax: 763-428-2534 5c. Fire Apparatus/Equipment: Rogers Fire apparatus consists of three 1250 GPM pumpers, a 1000 GPM pumper, rescue vehicle with a mobile air cascade system and incident command center, 3500-gallon water tanker, 100’ ladder truck, Life Safety Trailer for Rehab, two rescue vehicles, a grass rig, inspector vehicle and a Fire Chief vehicle. Specialized equipment includes automatic defibrillators, three sets of Jaws of Life, water/ice rescue equipment, confined space equipment, and hazmat supplies. New Hires: In August of 2016, four (4) firefighters were hired, which brought the Fire Department to full staffing levels of 41 active firefighters. After completing the hiring requirements, the four firefighters will began their firefighter I, II, Hazmat Operations, and First Responder Training. The new firefighters have 2 years to complete the required training. iPad Project: In 2016, staff completed the installation of iPads in our fire trucks. The new iPad units will provide accurate call information, event locations, nearest hydrants, and units in service. The iPads are equipped with the following Apps: Incident Command/Officer Field Guide, Auto/Extrication, Hazmat Guide documents, real time weather, aerial/GPS mapping, and building preplans. Self-Contained Breath Apparatus (SCBA) Project: In 2014, the Rogers City Council approved a five-year project to replace the fire departments existing 2216psi SCBA equipment. Per NFPA/OSHA requirements, SCBA equipment is required to be replaced after 15 years of service. In 2016, Engine 11 was updated to the new 4500psi bottles/packs and Aerial 11 is scheduled for new air packs in August of 2017. The total cost of the project is approximately $135,000. New ATV Grass Rig 5c. Attached are charts showing Call Type Breakdown, Activity Summary, Average Response Times, and Calls by Day of Week 5c. I want to thank all firefighters of the Rogers Fire Department for their commitment to excellence and dedication to our communities. Respectfully yours, Bradley W. Feist Bradley W. Feist Fire Chief/Fire Marshal/Emergency Manager CITY OF ROGERS 5c. CITY OF CORCORAN Joint Council and Commissions Work Session Minutes March 16, 2017 - 7:00pm The Corcoran City Council, Planning Commission, and Parks and Trails Commission met on March 16, 2017 in work session, at City Hall in Corcoran, Minnesota. Present from the Council were: Mayor Thomas, Councilor Bottema, Councilor Dejewski, Councilor Keefe, and Councilor LaFave. Present from the Planning Commission were: Chair Jacobs, Commissioner Russell, Commissioner Wu, Commissioner Theis, and Commissioner Schultz. Present from the Parks and Trails Commission were: Chair Anderson, Commissioner Krueger, Commissioner Strehler, and Commissioner Meister. Absent were: Commissioner Nybo, Commissioner Robran, Commissioner Regan, and Student Commissioner Beck. Also present were City Administrator Martens, City Planner Lindahl, Director of Public Safety Gottschalk, City Clerk/Administrative Services Coordinator Beise, and Code Compliance Official Pritchard. 1.Welcome and Introductions Mayor Thomas called the work session to order at 7:01pm on Thursday, March 16, 2017. 2.Landform Presentation City Planner Lindahl made her presentation regarding the 2040 Comprehensive Plan update including statutory and Metropolitan Council requirements as well as major changes since the 2030 Comprehensive Plan. 3.Vision for the 2040 Comprehensive Plan Update Council and Commissions completed a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis and discussed the 2040 vision. 4.Next Steps City Planner Lindahl reviewed next steps. 5.Adjourn MOTION: made by Bottema, seconded by Keefe to adjourn. Voting Aye: Thomas, Bottema, Dejewski, LaFave, and Keefe (Motion carried 5:0) Meeting adjourned at 8:44pm. ________________________________ Mike Pritchard – Code Compliance Official 6a. CITY OF CORCORAN City Council Meeting Minutes March 23, 2017 - 7:00pm The Corcoran City Council met on March 23, 2017 at City Hall in Corcoran, Minnesota. Present were Mayor Thomas, Councilor Keefe, Councilor Keefe, and Councilor LaFave. Councilor Dejewski was excused. Also present were City Administrator Martens, City Clerk/Administrative Services Coordinator Beise, and Director of Public Safety Gottschalk. 1.Call to Order / Roll Call Mayor Thomas called the meeting to order at 7:00 pm. 2.Pledge of Allegiance Mayor Thomas invited all in attendance to rise and join in the Pledge of Allegiance. 3.Agenda Approval City Administrator Martens noted the addition of Item 6c. Resolution 2017-14 Authorizing Accountant Joe Rotz for Fund Transfers and Inquiries at Farmers State Bank of Hamel and additional claims presented. MOTION: made by Bottema, seconded by Keefe to approve the agenda as amended. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) 4.Presentations No presentations were heard. 5.Open Forum Doorthy Theis, 9530 Cain Road, was asked to address the her comments under Item 11c. Greg Hoglund, 19220 Hackamore Road, addressed the Council regarding the public input and the 8th Addition of the Ravinia Lennar. Specifically Mr. Hoglund thanked the Mayor and City Administrator Martens for meeting with him and changing the public comment process at City Council meetings. Additionally Mr. Hoglund addressed the Council regarding his interactions with Lennar, specifically offer letters that were produced by Lennar which were not received by the Hogulnd’s. Jackie Hoglund, 19220 Hackmore Road, address the Council regarding Lennar and the run off from the Lennar project. Ms. Hoglund requested an action plan from the City related to Lennar and violations. 6.Consent Agenda a.Draft Minutes of the March 9, 2017 Council Meeting b.Resolution 2017-13 Supporting the Northwest Trails Association Grant Application c.Resolution 2017-14 Authorizing Accountant Joe Rotz for Fund Transfers and Inquiries at Farmers State Bank of Hamel Councilor Bottema inquired about the resolution authorizing the accountant to transfer funds. City Administrator noted the requirements of the position and it is standard to authorize such access when the accountant is hired. MOTION: made by Bottema, seconded by Keefe to approve the consent agenda as presented. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) 7.Claims as Presented a.Escrow Claims (Fund #500) 6b. MOTION: made by LaFave, seconded by Keefe to approve escrow claims as presented. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) b. All Other Financial Claims MOTION: made by Bottema, seconded by Keefe to approve all other claims as presented with the additional claims. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) 8. Staff Reports / Memos/Commissions a. Commissioner Representatives Mayor Thomas noted Planning Commissioner Theis and Parks and Trails Commissioner Regan were in attendance. b. Planning Project Update; report received. c. Code Compliance Report; report received. 9. Planning Business a. Final PUD Development Plan and Final Plat for U.S. Home Corporation (dba Lennar) for Ravinia 8th Addition at 6635 County Road 101 (City File-17-002) City Planner Lindahl presented the report noting the out lot be provided for a trail connection would serve as an emergency vehicle turn around. Council discussed where the pavement of the street ends. City Administrator Martens noted that engineering staff had spoken with the property owner to the north. Council discussed improving the trail to gravel, signage for a future trail, and the storm water pond. City Planner Lindahl noted that staff is working with the applicant to have one storm water pipe rather than the planned two pipes as this would reduce maintenance requirements in the future. Council discussed the relationship between neighbors and builders. MOTION: made by Keefe, seconded by Bottema to adopt Resolution 2017-09 Approving Final Planned Unit Development Plan for the Lennar on the Schwalbe Property at 6635 County Road 101. Council discussed requiring additional trees along the northern property line. Voting Aye: Thomas, Bottema, and Keefe Nay: LaFave (Motion carried 3:1) MOTION: made by Keefe, seconded by Bottema to adopt Resolution 2017-10 Approving Final Plat and Development Contract for Ravinia 8th Addition. Voting Aye: Thomas, Bottema, and Keefe Nay: LaFave (Motion carried 3:1) b. Sketch Plan for Gmach Property (PID 05-119-23-13-0002) City Planner Lindahl presented the report noting there were three proposed concepts all of which require a variance or code amendment. City Planner Lindahl noted the applicant was seeking feedback on the wetland delineation requirements. Applicant George Gmach noted that he is now considering only two lots. Council inquired about the cost of delineation; the applicant noted approximately $5,000 per propose lot. Council discussed and provided feedback delineation, the cost of delineation, safety of access on Oakdale, frontage, and access through the adjacent neighborhood. c. PUD Sketch Plan for MI Homes of Minneapolis, LLC for land at 19400 County Road 10 (PID 25-119-13-0002 and 25-119-23-13-0003) City Planner Lindahl presented the report noting the conflict with the land use and zoning maps and solutions to fix this. The report inquired about the lot size, and setbacks. John Rask addressed the Council regarding the sketch plan, noting the target market is 55+ with one level living. Council inquired about and discussed with the applicant the detached home versus townhomes, association fees and lower price point. Council discussed and provided feedback on the proposed trail, landscaping, road safety with County Road 10 and Larkin, variances, lot sizes and set backs, varying price points, and tennis court or other recreation amenity. Council discussed the comprehensive plan amendment and provide their feedback to the applicant. d. Proposed Miscellaneous Ordinance Updates (City File 17-005) City Administrator Martens presented the report noting staff is recommending ordinance clean up changes to City Code that are clean up in nature and not policy items. Council discussed the requirement for a fence permit, the use of variances, and a recognition that the code should be cleaned up. MOTION: made by Bottema, seconded by Keefe to direct staff to prepare these ordinance amendments for consideration as outlined in the staff report. Council inquired about the public communication with the update. City Administrator Martens noted that the public hearing notice would be in the paper. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) 10. Unfinished Business a. Assessment Policy Approval City Administrator Martens noted a new report was on the dais. City Administrator Martens presented the report outlining the changes to the assessment policy that was provided, copy of which was added to the agenda book. Council discussed the assessment value. City Administrator Martens noted that per a conversation with an appraiser the higher value the home a higher assessment could be calculated. Council discussed the thirty years statutory limit and a levy forgiveness. Council discussed interest for Green Acres developed property and not accruing interest on undeveloped property in Green Acres. Councilors clarified the formula related to assessments. Council discussed the hardship ordinance. Per consensus, staff was directed to incorporate feedback into the policy. b. Public Interaction at Council Meetings City Administrator Martens presented the report noting that the comment cards categories are not required. Council discussed the process and making the public aware of the new process. MOTION: made by Bottema, seconded by Keefe to direct staff to implement the new public comment system beginning at the April 13, 2017 meeting. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) 11. New Business a. Public Works Director Job Description and Recruitment City Administrator Martens presented the report noting the proposed duties of the Public Works Director, the proposed budget impact, and the timeline for the hiring process. Council noted that this had been discussed multiple times. MOTION: made by Keefe, seconded by LaFave to approve the job description and authorize staff to begin the recruitment process for Public Works Director. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) b. City Council Strategic Goal Work Plan City Administrator Martens presented the report outlining the proposed work plan which will change as action steps for certain goals will be reviewed and additional implementation steps would be added. Council discussed the plan and having the meeting with the Metropolitan Council be a fact finding meeting. MOTION: made by LaFave, seconded by Keefe to approve the Strategic Goal Work Plan as presented. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) c. School District Lease Agreement City Administrator Martens presented the report noting that without the lease extension as presented the scheduled 300 children participating in activities would not be able to use the fields. Dorothy Theis, 9350 Cain Road, address the Council noting that Jaycees and Lions funds for the park improvements on the school district property. Council discussed breaking down barriers between the school district and providing a discount to Corcoran residents. MOTION: made by Keefe, seconded by Bottema to authorize the Mayor and City Administrator to enter into a lease agreement with the Rockford School District for use of playing fields. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) d. 2017 Truck Safety Mayor Thomas read aloud Resolution 2017-12 Commendation of the Truck Safety Seminar and Approval of Donated Funds. Council thanked staff for their efforts. MOTION: made by LaFave, seconded by Keefe to adopt Resolution 2017-12 Commendation of the Truck Safety Seminar and Approval of Donated Funds. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) 12. 2017 Council Schedule City Administrator Martens reviewed the upcoming schedule, noting the Open Book meeting is before April 13th meeting which is the opportunity for residents to discuss their valuation. 13. Council Liaison Calendar The Council liaison calendar was not reviewed, but was available in the Council Packet. 14. Adjournment MOTION: made by Bottema, seconded by LaFave to adjourn. Voting Aye: Thomas, Bottema, Keefe, and LaFave (Motion carried 4:0) Meeting adjourned at 9:43pm. ________________________________ Jessica Beise – City Clerk/Administrative Services Coordinator STAFF REPORT Agenda Item 6c. Council Meeting: April 13, 2017 Prepared By: Jessica Beise Topic: 2017 Wage Scale Amendment Action Required: Approval Summary: Upon preparing to post the employment ad for seasonal public works workers, staff noticed an error in the 2017 wage scale that was approved December 19, 2016 in the part-time staff section for the Seasonal Public Works Maintenance Worker 1, Seasonal Public Works Maintenance Worker 2 and the Snow Plow Operator. The attached amended wage scale is the corrected version for approval. Financial/Budget: The budget was not impacted as the budget was reflective of the top of the wage scale as there was a possibility of returning seasonal workers. Alignment with Values: This item relates to the following adopted values: FISCAL RESPONSIBILITY We believe that fiscal responsibility and the prudent stewardship of public funds is essential for citizen confidence in government. Council Action: Adopt the amended 2017 Wage Scale. Attachments: 1. Amended 2017 Wage Scale PROPOSED 2% WAGE INCREASE Grade Start 6 Months 1 Year 2 Years 3 Years 4 Years 5 Years 1 $16.13 $16.72 $17.31 $17.90 $18.49 $19.08 $19.66 2 $17.07 $17.69 $18.31 $18.94 $19.56 $20.19 $20.81 3 $18.06 $18.72 $19.38 $20.04 $20.70 $21.36 $22.02 4 $19.11 $19.81 $20.51 $21.21 $21.91 $22.61 $23.31 5 $20.23 $20.97 $21.71 $22.45 $23.19 $23.93 $24.67 6 $21.41 $22.19 $22.97 $23.76 $24.54 $25.32 $26.11 7 $22.65 $23.48 $24.31 $25.14 $25.97 $26.80 $27.63 8 $23.98 $24.85 $25.73 $26.61 $27.48 $28.36 $29.24 9 $25.37 $26.30 $27.23 $28.16 $29.09 $30.01 $30.94 10 $26.85 $27.84 $28.82 $29.80 $30.78 $31.76 $32.75 11 $28.42 $29.46 $30.50 $31.54 $32.58 $33.62 $34.66 12 $29.80 $30.90 $31.99 $33.08 $34.17 $35.26 $36.35 13 $31.26 $32.40 $33.55 $34.69 $35.83 $36.98 $38.12 14 $32.64 $33.83 $35.02 $36.22 $37.41 $38.61 $39.80 15 $34.07 $35.32 $36.57 $37.81 $39.06 $40.31 $41.55 16 $35.57 $36.88 $38.18 $39.48 $40.78 $42.08 $43.38 17 $37.14 $38.50 $39.86 $41.22 $42.58 $43.94 $45.30 18 $38.60 $40.01 $41.42 $42.83 $44.25 $45.66 $47.07 19 $40.11 $41.58 $43.05 $44.51 $45.98 $47.45 $48.92 20 $41.68 $43.21 $44.73 $46.26 $47.78 $49.31 $50.83 Position Start 1 Year 2 Year PD PT Admin Ast 20.00$ Rink Attendant 9.50$ 10.03$ 10.56$ Maintenance Wor 11.23$ 11.86$ 12.48$ Maintenance Wor 14.99$ 15.82$ 16.65$ Snow Plow Operat 20.60$ 21.75$ 22.89$ Recreational Progr 12.00$ Start-2080 hours 2081-4160 hours Over 4160 hours Police Officer-PT $22.95 $24.23 $25.50 Grade Start 6 Months 1 Year 2 Years 3 Years 4 Years 5 Years 1 $16.29 $16.88 $17.48 $18.07 $18.67 $19.27 $19.86 2 $17.24 $17.87 $18.50 $19.13 $19.76 $20.39 $21.02 3 $18.24 $18.91 $19.58 $20.24 $20.91 $21.58 $22.24 4 $19.30 $20.01 $20.72 $21.42 $22.13 $22.84 $23.54 5 $20.43 $21.18 $21.92 $22.67 $23.42 $24.17 $24.91 6 $21.62 $22.41 $23.20 $23.99 $24.78 $25.58 $26.37 7 $22.88 $23.72 $24.56 $25.39 $26.23 $27.07 $27.90 8 $24.22 $25.10 $25.99 $26.87 $27.76 $28.64 $29.53 9 $25.63 $26.56 $27.50 $28.44 $29.38 $30.31 $31.25 10 $27.12 $28.11 $29.11 $30.10 $31.09 $32.08 $33.07 11 $28.70 $29.75 $30.80 $31.85 $32.90 $33.95 $35.00 12 $30.10 $31.20 $32.31 $33.41 $34.51 $35.61 $36.71 13 $31.57 $32.73 $33.88 $35.04 $36.19 $37.35 $38.50 14 $32.96 $34.17 $35.37 $36.58 $37.79 $38.99 $40.20 15 $34.41 $35.67 $36.93 $38.19 $39.45 $40.71 $41.97 16 $35.93 $37.25 $38.56 $39.87 $41.19 $42.50 $43.82 17 $37.51 $38.89 $40.26 $41.63 $43.00 $44.38 $45.75 18 $38.98 $40.41 $41.84 $43.26 $44.69 $46.12 $47.54 19 $40.51 $42.00 $43.48 $44.96 $46.44 $47.92 $49.41 20 $42.10 $43.64 $45.18 $46.72 $48.26 $49.80 $51.34 Position Start 1 Year 2 Year PD PT Admin Ast 20.20$ Rink Attendant 9.60$ 10.13$ 10.67$ Maintenance Wor 11.34$ 11.97$ 12.60$ Maintenance Wor 15.13$ 15.98$ 16.82$ Snow Plow Operat 20.81$ 21.96$ 23.12$ Recreational Progr 12.12$ Start-2080 hours 2081-4160 hours Over 4160 hours Police Officer-PT $23.18 $24.47 $25.76 2017 PART-TIME AND SEASONAL WAGE SCHEDULE EXHIBIT A - 2017 FULL-TIME, PART-TIME, AND SEASONAL WAGE SCHEDULE Steps 2017 PART-TIME AND SEASONAL WAGE SCHEDULE 2017 FULL-TIME WAGE SCHEDULE Steps PROPOSED MID YEAR 1% WAGE INCREASE STAFF REPORT Agenda Item. 6d. Council Meeting: April 13, 2017 Prepared By: Jessica Beise Topic: Lien Release Request Action Required: Direction Summary: The City received a request to release a lien for a mobile home in Maple Hills on which the City currently holds a lien. It was discovered that property owner had utilized a Hennepin County Block Grant home improvement program that allowed them to complete home repairs through a loan. As part of the grant agreement the City placed a lien on the property so if the property were to sell within ten years of the loan the property owner would be responsible for paying Hennepin County for the loan. The lien was placed on the property in 2001. Since more than ten years has elapsed, the loan does not have to be repaid and the lien can be released. Staff has conferred with the City Attorney that the homeowner has no obligation to repay the loan and the lien can be released. Financial/Budget: N/A Alignment with Values: This item relates to the following adopted values: EXCELLENCE AND QUALITY IN THE DELIVERY OF SERVICES We believe that service to the public is our reason for being and strive to deliver quality services in a highly professional, cost-effective, and friendly manner. TREATING THE CITIZEN AS OUR CUSTOMER We believe that citizens are our customers and should be treated with courtesy, respect, and deserve the best services we can provide. Council Action: Authorize the Mayor to sign the Notification of Assignment, Release or Grant of Secured Interest to release the lien. Attachments: 1. Notification of Assignment, Release or Grant of Secured Interest 2. Homeowner’s Agreement with Hennepin County CITY OF CORCORAN 04/13/17 2:16 PM Page 1 *Check Summary Register© March 2017 Name Check Date '�1".a�r "."� � �- �«� -w.A " ;�- "�',,,�.�`- ."yf`�°' _ '"."'�.�y.. �+' �..^r:,. -;.3 �?" 1 �S"� -Y.', -"� �?':. '�"C` .�,�'•r- •v�•"ri r �� .7E� -- �+r.�_,= a.,. r` �'.. rb' � •�.r.� €.3;�.�,r�..:i <<fx�r�:�., ��...�- �.'"��.s4 .r�?��is�i:.'�.�!.�_.. . �? �'3 u': ��c.=.` �a..:. ��. �.. __�L.�r'i:a���w�si�r+6s.:_. -_.. . 10100 Farmers State Bank UnPaid RESOURCE TRAINING & SOLUTI Unpaid RTS DRUG TESTING Check Amt t: M - 1 1 .Y $57,368.50 HEALTH INSURANCE $80.00 TESTING Total Checks $57,448.50 CITY OF CORCORAN 04/13/17 2:16 PIVI Page 1 *Check Summary Register© March 2017 Name Check Date Check Amt 10100 Farmers State Bank UnPaid RESOURCE TRAINING & SOLUTI $57,368.50 HEALTH INSURANCE UnPaid RTS DRUG TESTING $80.00 TESTING Total Checks $57,448.50 T�-f -a-P b � �, L l u�-r� CI�u was � co25ti1��.3�F STAFF REPORT Agenda Item 8a. Council Meeting: April 13, 2017 Prepared By: Brad Martens Topic: Commission Representatives Action Required: None – Informational Summary: The advisory commission representatives for the April 13th Council meeting are as follows: Planning Commission: Alan Schultz Parks and Trails Commission: Val Nybo Financial/Budget: N/A Alignment with Values: This item relates to the following adopted values: OPEN AND HONEST COMMUNICATION We believe that open and honest communication is essential for an informed and involved citizenry and to foster a positive working environment for employees. EQUAL OPPORTUNITY We believe that every employee and citizen should be afforded an equal opportunity to participate in all aspects of employment, citizenship, and governance in the City of Corcoran based exclusively on their ability to contribute. Options: N/A Recommendation N/A Council Action: N/A Attachments: N/A STAFF REPORT Agenda Item 10a. Council Meeting: April 13, 2017 Prepared By: Brad Martens Topic: Assessment Policy Approval Action Required: Approval Summary: At the March 23, 2017 City Council meeting, the latest version of the proposed assessment policy was discussed. Council provided staff direction on changes and directed staff to send an updated draft to Council to receive final proposed amendments in advance of the April 13th meeting. Attached to this report is the updated policy. Language has been amended by the City Attorney to on pages 12 and 19 help to clarify that on a green acres property that has both homestead and non-homestead classifications, the City would assess for one unit for the home which would not be eligible for deferral, and additional assessable units could then be deferred. Example: 40 acre property on gravel road Before project has no additional building rights After project has three additional building rights City would assess one unit for the homestead like any other home, the new three building rights would be deferred without interest. Additionally, Councilmember Dejewski has proposed a change in language found on page 11. It is requested that Council decide which version of that paragraph to include and approve the policy by resolution. Financial/Budget: The assessment policy guides how cost sharing will take place for proposed improvements. Alignment with Values: This item relates to the following adopted values: EXCELLENCE AND QUALITY IN THE DELIVERY OF SERVICES We believe that service to the public is our reason for being and strive to deliver quality services in a highly professional, cost-effective, and friendly manner. FISCAL RESPONSIBILITY We believe that fiscal responsibility and the prudent stewardship of public funds is essential for citizen confidence in government. Page 2 Options: 1. Approve Resolution 2017-11 Approving Special Assessment Policy and Procedures. 2. Send back to staff for further review. Recommendation: Approve Resolution 2017-11 Approving Special Assessment Policy and Procedures as drafted. Council Action: Consider a motion to approve Resolution 2017-11 Approving Special Assessment Policy and Procedures as drafted. Attachments: 1. Resolution 2017-11 Approving Special Assessment Policy and Procedures 2. Special Assessment Policy and Procedures City of Corcoran April 13, 2017 County of Hennepin State of Minnesota RESOLUTION NO. 2017-11 Page 1 of 1 Motion By: Seconded By: A RESOLUTION APPROVING SPECIAL ASSESSMENT POLICY AND PROCEDURES WHEREAS, the City Council of the City of Corcoran desires to approve a special assessment policy and procedure in order to guide future assessments related to water, sanitary sewer, storm sewer, and streets; and WHEREAS, the City wishes to approve a new policy which will supersede and replace any previous policies previously approved to guide City action related to such assessments. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Corcoran, Minnesota that the City Council approves the attached Special Assessment Policy and Procedures which supersedes and replaces any previous approved policies which pertain to assessments related to water, sanitary sewer, storm sewer, and streets. VOTING AYE VOTING NAY Thomas, Ron Thomas, Ron Bottema, Jon Bottema, Jon Dejewski, Brian Dejewski, Brian Keefe, Mike Keefe, Mike LaFave, Tonya LaFave, Tonya Whereupon, said Resolution is hereby declared adopted on this 13th day of April , 2017. ________________________________ Ron Thomas - Mayor ATTEST: ____________________________________ City Seal Jessica Beise – City Clerk/Administrative Services Coordinator Special AssessmentPolicy Purpose: The City's special assessment policies and procedures have been established to: 1. Provide a stable and continuing source of funding within the financial capacity of the City, in combination with federal, state, county, and other local financial resources available to the City, to accommodate infrastructure needs for new development, redevelopment, and maintenance within the existing community in the most cost - effective manner. 2. Balance needs and costs for new and existing infrastructure to support and promote economic development and growth as well as maintenance within the existing community by providing for the equitable distribution of infrastructure costs to ensure that specific developments are financially self-supporting to the extent warranted. 3. Provide a comprehensive, well- constructed and well- maintained infrastructure system that services individual properties and takes advantage of economies on a regional scale and flexibility in the timing of infrastructure development. 4. Respond to community needs and desires for health, safety, welfare; accessibility, and mobility provided by new infrastructure and the maintenance of existing infrastructure. 5. Function in harmony with the City's comprehensive plan and growth area plans by providing the infrastructure and amenities associated with those plans thereby promoting orderly growth in areas where services are available or can be provided at the most reasonable cost. 6. Provide the City Council and staff with guidelines and methods to efficiently distribute infrastructure costs to benefiting properties in an equitable and consistent manner thereby enhancing the value of property by assigning a proportionate value of the improvements to the properties deriving benefit from the improvement. General Policy Statement: While the special assessment purposes, policies and procedures have been identified herein, the City Council may deviate from this policy when such rationale in equity arises or the law is required. I. Policy Definitions: A. Adjacent Property: A property directly adjacent to public improvements. Page 1 of 19 B. Access: Properties shall be considered to have access to public street improvements when they may enter onto the improvement from their own private driveway, private road, or public street, or when the street classification would allow the property to be granted driveway access. Properties shall be considered to have access to underground utility improvements when they directly abut the property or may be available to the property by utility or road easement/ROW, and the City has included the property within a defined services area approved for immediate utility service. C. Accrued Interest (or Compounded Interest): Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. D. Adjusted Area: An area of a benefited property that has been modified by an adjustment factor to more accurately represent the true benefit that property receives from an improvement in comparison to other properties in the assessment area. The adjustment will be based on the improvement design parameters that are applicable to that parcel, as approved by the City Council. Design parameters that may be used to determine the adjustment factor include, but are not limited to, trip generation, storm water runoff coefficients, water or sanitary sewer use, needed fire flow, and zoning or future land use. E. Assessed Cost: Those costs of public improvements that have been determined to benefit specific properties. The assessed cost will be equal to the project cost minus the City cost. Project costs eligible for assessment include all costs associated with the improvements, including, but not limited to, land acquisition, demolition, construction, administration, engineering, legal, financing and other costs as determined by the City Council. The financing charges include all costs of financing the project. These costs include, but are not limited to, financial consultant's fees, bond attorney's fees, and capitalized interest. F. Assessable Footage: The assessable footage is the total front footage of all of the benefiting properties, calculated by using the front footage method. G. Assessment Rate: The assessment rate for improvements other than streets is determined by dividing the assessable cost of an improvement by the total number of assessment units such as the total adjusted front footage or square footage, acreage, number of lots, or number of parcels. H. Assessment Unit: Front footage, area, or unit used to compute the costs on the basis of individual assessments. I. Benefit: The increase in property value as a result of a public improvement such as a street, sidewalk, trail, curb and gutter, water main, sanitary sewer, storm sewer, park, or street landscaping. Page 2 of 19 J. Deferment: A process of postponing the collection of the cost of public improvements and funding them as a system cost with the intention of collecting the cost at a later date. K. Driveway Approach: That area which lies between the existing pavement to the right - of- way line; curb cut to curb cut. For assessment purposes driveway approach refers to the road surfacing, not stormwater conveyance such as ditching or culverts. L. Front Footage: The distance measured along the right -of -way line that directly abuts an improvement, not counting Side -Lot Footage. M. Limited Access Street: A street, such as a major or minor collector street, which because of its high volume of traffic has been designated by the City for controlled access, meaning the number of access points to the street will be limited. N. Lot Definitions: 1. Corner Lot: A lot located at a street intersection having both front and side -lot footage. 2. Double Frontage Lot: A lot with access to two separate non - intersecting or intersecting streets but not a corner lot. 3. Irregularly Shaped Lot: Those lots abutting curved streets, cul -de- sacs, or other lots where there is more than five feet of difference in length between the front and back lot lines. 4. Rectangular Lot: A lot with less than five feet of difference in length between the front and back lot lines. O. Public Improvement: Improvements as allowed by State statute that provide a special benefit to properties, including but not limited to streets, sidewalks, trails, curb, gutter, sanitary sewer systems, storm sewer systems, water treatment and distribution systems. P. Special Assessment: A legal process whereby the benefited property is charged for all or a portion of the cost of public improvements. Q. Standards for Surface Improvements: Standards for surface improvements have been established in the City's Engineering Standards. R. Street: All public ways designed as means of access to the adjoining properties. Streets are classified into six groups and classified per a Collector or Local street status in the City's Comprehensive Plan: 1. Local Gravel — Local gravel streets have lower traffic counts as compared to collector gravel streets, have a gravel finish, and utilize rural ditches for stormwater conveyance. Examples include, but are Page 3 of 19 not limited to, Hidden Ponds Drive, Meadow Circle, Nystrom Lane, Rush Meadow Lane,, and Treeline Drive. 2. Collector Gravel - Collector gravel streets have higher traffic counts as compared to local gravel streets, have a gravel finish, and utilize rural ditches for stormwater conveyance. Examples include, but are not limited to, Trail Haven Road, Cain Road, Bechtold Road, Old Settlers Road, and Willow Drive. 3. Rural Local Asphalt — Rural local asphalt streets have a bituminous finish and utilize ditches for stormwater conveyance. Examples include, but are not limited to, Cates Longhorn Road, Abilene Lane, Butterworth Lane, Hunter Road, and Dassel Lane. 4. Urban Local A — Urban local asphalt streets have a bituminous finish and utilize curb and gutter for stormwater conveyance. Examples include, but are not limited to, Bridle Path, Carriage Way, Prairie Sage Lane, and Sorrel Court. 5. Rural Collector A — Rural collector asphalt streets have higher traffic counts than local streets, have a bituminous finish, and utilize ditches for stormwater conveyance. Examples include, Oakdale Drive. 6. Urban Collector Asphalt — Urban collector asphalt streets have higher traffic counts than local streets, have a bituminous finish, and utilize curb and gutter for stormwater conveyance. Examples include, Gleason Parkway. S. Street Treatment Definitions: 1. Crack Seal and Seal Coat - Crack sealing involves patching and sealing cracks in the roadway. This is followed by seal coating, which involves spraying the road with oil and covering it with a layer of small rock. Crack sealing and seal coating is generally considered routine roadway maintenance. The recommended interval is 6-8 years with first application about 7 years after new roadway construction. 2. Mill and 0 - Milling and overlaying consists of grinding off the upper layer of asphalt (in urban sections) and replacing it with a new layer of asphalt. This is generally done on roadways that have a fair amount of cracking and other surface distress, usually at about 60% of the street's life cycle. This is considered a structural improvement that will renew the street surface and extend its useful life. 3. Rehabilitate - Rehabilitating a roadway consists of grinding up the existing Page 4 of 19 asphalt and mixing it with a portion of the underlying gravel base (typically 4 "- 8"). This combination of bituminous and gravel is then used as the new road base, and a new asphalt surface is paved over this. This is generally done on roadways that have a significant amount of distress. This can be a good alternative to reconstructing a road if the existing road base appears to be structurally sufficient. 4. Reconstruct - Reconstructing a roadway includes improving_ a gravel road to a paved road or ensists e f completely removing the existing road and underlying gravel and sand base material, and constructing a new road section. This may also include correcting any poor base material beneath the section, or updating the road to meet design standards such as width and drainage. This is often done in conjunction with utility repairs /replacement. Generally done on roadways that exhibit signs of major distress, such as rutting, cracking, andpotholes. T. System Cost: That portion of the assessable cost that benefits properties whose assessments are deferred because they qualify for green acres status, are located outside of the City limits, or are unable to make use of the improvements due to factors beyond their control. The City may reimburse itself for such system costs from the benefitting properties when the basis for the deferral is no longer valid. U. Unit: A unit, for purposes of defining an assessment, may include, but is not limited to: a household; a parcel /lot; water or sewer main length and size; sidewalk or trail length, width and depth; driveway approach length, width and depth. II. Policy Implementation and Procedures: A. Assessment Classification The assessment process shall address the feasibility of physical construction and also the affordability of the improvements. In meeting these responsibilities, a classification system is established below for public improvement projects based on the design capacity and the level of use. Cost apportionment is based on the extent of use of the improvement by the benefiting property owners and City policies for street paving, curb, gutter, and sidewalk construction shall be used as a basic guide. The classification system groups improvements into the three categories: • Type I improvements consist of projects that are mostly of benefit to the abutting properties and include local streets, curb, gutter, water and sewer services, and driveway improvements. Street construction, sidewalk, paving, storm sewer, sanitary sewer, and water mains may be Type I if solely designed to serve the abutting properties. • Type II improvements consist of projects that benefit a larger, yet definable, area. Street construction, sidewalk, paving, storm sewer, sanitary sewer, and water mains may also be Type II if the improvement benefits a larger area. Collector streets, which are likely to be used by a broader segment of the public, should be proportionately assessed to a larger area. Page 5of19 • Type III improvements consist of large-scale projects of benefit to the entire City regardless of location. The criteria for designation of any improvement as Type III are facilities that serve areas larger than a definable neighborhood or those areas separated by major identifiable barriers, such as creeks, or county roads. Typically, Type III improvements are financed through a combination of Federal and State appropriations and available City funds; however, special assessments may be needed to fully fund the project. If financial assistance is received by the City from the Federal Government, from the State of Minnesota!, the County, or from any other source to defray a portion of the costs of a given improvement, such aid will be used first to reduce the "City cost" of the improvement. If the financial assistance received is greater than the normal "City cost", the remainder of the aid will be applied according to the terms of the assistance program or at the Council's discretion. The assessment classifications are listed in Table I below. The City Council may from time to time adjust the classification of improvements to maintain the equitability of the assessment cost. Tnblip I C1n-QQifivnfinn Type I Improvements Type 11 Improvements Type III Improvements Trunk Sanitary Sewers Curb & Gutter (greater than 8" diameter) Bridges Trunk Water Main (greater Community Facilities Sidewalks and trails, 5 feet than 8" diameter) and Library wide or less Looped Water Main Law Enforcement Fire Station Sanitary Sewer Laterals (less than or equal to 8" diameter) Collector Streets Water Main (less than or Sidewalks and trails, greater Community Parks equal to 8" diameter) than 5 feet wide Sewer & Water Services Storm Drainage Wastewater Treatment Facilities Improvements Local Streets/Alleys Pumping Stations Water Tower Storm Drainage Water Treatment Plant Improvements Other improvements mandated or authorized by law B. Methods ofAssessment The City shall use the following methods in determining assessments for public improvements. Page 6 of 19 1. Front Footage Method This method computes the assessable frontage for the project and for each property. The assessment rate is obtained by dividing the total assessable cost by the assessable footage in an assessment district. The assessment for each parcel is then obtained by multiplying the assessment rate times the front footage for each property. Front footage is determined as follows: a. For rectangular lots, the front footage shall be the same as the front footage at the right-of-way. b. For irregularly shaped lots, the front footage will typically be calculated as the width of the lot as defined in the City's zoning ordinance, although other methods may be used at the City's discretion (such as average lot width) if they are determined to be more equitable. c. For all comer lots, street assessments, regardless of the orientation of the house, shall be based on one-half of the footage of the road being improved. d. For a rectangular comer lot, water and sewer assessments, regardless of the orientation of the house, the short side of the lot shall be considered to be the "frontage". e. Double frontage lots may be assessed for any street improvement that it has direct access to, if the lot is of such size that it could be split into multiple buildable lots. The front footage for each improvement will be determined in accordance with the above- described policies, whichever is appropriate. 2. AreaMethod This method computes cost on a square foot or acreage basis. The assessment rate is determined by dividing the total assessable cost by the total benefiting area. A parcel's assessment is then determined by multiplying the assessment rate times the benefiting area of the parcel. When the benefiting area includes both platted and un- platted properties, the gross benefiting area will be used to apportion the benefit among the properties. An adjustment factor reflecting land use may be applied to a parcel's benefiting area in some cases. For example, for storm sewer design, the assumed rate of runoff per acre from a commercial lot is greater than the runoff rate from a residential lot. If all uses are the same in a project area (single family, multi- family, commercial, or industrial), the assessment rate is the same for all. Where there is variation in residential density or uses, the assessment rate may be adjusted to reflect the corresponding differences in benefit. The assessable area shall include all properties legally eligible for assessments. The following items may not be included in area calculations: public right-of-ways, natural waterways, lakes or other wetlands. 3. Unit Method This method computes the costs on the basis of individual assessment units. For example, sewer and water services, sidewalks, trails, and driveway approaches are typically considered separate individual units. The total project cost is divided by the total number of assessment units to calculate the fixed cost. Assessment units could be determined on a per lot or per unit basis, or any combination thereof. For lots that may be further Page 7 ,of 19 subdivided, the City may determine the number of assessable units based on the number of equivalent lots that could be created from a particular parcel. Combination Method This method involves using one or more of the above defined methods to more equitably calculate assessments. The combination method may be considered when there is varying land use, undeveloped properties available for future development, or other circumstances involving the defined public improvement that may provide assessment inequities. C. Determination of Assessable Costs, Rate and Term 1. Water System a. Water Mains: The assessable cost for installing new water main improvements shall be based on the level of service required by the property. In residential areas, 100% of the cost of installing water main that is 8- inches in diameter or less shall be assessed to the benefiting properties, and up to 50% for reconstruction, see chart below. In commercial areas, 100% of the cost of installing new water main and 50% of the cost of reconstruction will be assessed, based on current design standards. The cost of over sizing the water main for general distribution purposes shall not be assessed. Where larger diameter water mains are required to serve commercial, industrial or institutional properties, the increased cost of water main installation shall be assessed to those properties. Where improvements are designed to serve an area beyond that of direct benefit, the City may deferpostpone that portion of the assessment and fund itth as a system cost. The- &.71 --, benefits for- other se, Reconstruction Assessments — Water System Years After First Assessment Levied 1 City Share2 Assessed Share2 0 -20 years 100% 0% 20 -40 years 75% 25% Over 40 years 50% 50% iFrrst assessment refers to the original assessment for properties developed or platted at or before the time the improvement is constructed, or to the deferred assessment for properties developed or platted after the improvement is constructed. 2Percentage based on project construction cost. The assessed share of the project cost, as listed in the above table, will be apportioned against the benefiting properties. The City Engineer will use standard procedures to determine the benefiting property for each specific project. b. Water Services: The assessable cost for the construction or replacement of water services shall be 100% of the project cost. The unit cost method will be used to calculate the assessment. c. Length of Assessment: The assessment period for sanitary sewer improvements, including new construction and replacement projects, is a maximum of twenty years. Page 8 of 19 2. Sanitary Sewer Sanitary Sewer Assessments shall be based on engineering design standards. The assessable cost for installing sanitary sewer improvements shall be based on the type of service required by the property. In residential areas, 100% of the cost of installing new sanitary sewer that is 8-inches in diameter; and up to 50% for reconstruction, shall be assessed to the abutting properties. Where larger diameter sanitary sewers are required to serve commercial, industrial or institutional properties, the increased cost of installation shall be assessed to those properties. Where improvements are designed to serve an area beyond that of direct benefit, the City may defer that portion of the assessment and fund it as a system cost. a. Sanitary Sewer Assessment Formula: Assessments to be levied against properties within the benefited area shall be distributed to those properties on the basis of the following provisions: 1. Assessment Rate: The assessment rate shall be equal to the "assessable cost" of the improvement divided by the total number of assessable units benefited by the improvement. Projects having an uneven distribution of benefits may be subdivided into separate improvements using multiple assessment methods and rates to more equitably apportion the assessments. 2. Assessable Units: The assessable units shall be determined as follows: i. Lateral Sewers. The assessment method shall be the "unit method", unless otherwise specified by the Council. ii. Trunk Sewer and Lift Station. Trunk fees shall be charged as outlined in City Code, Chapter 51: Regulating Public Sanitary Sewer and Water Within the City of Corcoran. iii. Sewer Services. The assessable cost for the construction or replacement of sewer service lines shall be 100% of the project cost. The assessment shall be based on the number of sewer services installed for each individual property. This is the unit cost method of assessment. 3. Assessment Formula for Replacement: The following table shows the cost split for replacement of sanitary sewers (trunk sewers, lateral sewers, and lift stations), if they are to be assessed. Reconstruction Assessments — Sewer System Years After First Assessment Levied I City Share2 Assessed Share2 0-20 years 100% 0% 20-40 years 75% 25% Over 40 years 50% 50% Page 9 of 19 IFirst assessment refers to the original assessment for properties developed or platted at or before the time the improvement is constructed, or to the deferred assessment for properties developed or platted after the improvement is constructed. 2Percentage based on project construction cost. The assessed share of the project cost, as listed in the above table, will be apportioned against the benefiting properties. The City Engineer will use standard procedures to determine the benefiting property for each specific project. 4. Length of Assessment: The assessment period for sanitary sewer improvements, including new construction and replacement projects, is a maximum of twenty years. 3. Storm Sewer Storm sewer improvements shall be classified to include all storm sewer, storm sewer pumping stations, culverts, ditches, rain gardens, swales, street grading and any other improvement, which will facilitate drainage. The assessment for the construction of storm drainage improvements shall be based on the level of service required by the property. a. Storm Sewer Assessment Formula: Assessments to be levied against properties within the benefited area shall be distributed to those properties on the basis of the following provisions: 1. Assessment Rate: The assessment rate shall be equal to the assessable cost of the improvement divided by the total number of assessable units benefited by the improvement. Projects having an uneven distribution of benefits may be subdivided into separate improvements using multiple assessment methods and rates to more equitably apportion the assessments. 2. Assessable Units: The assessable unit!) unless otherwise specified by the Council, shall be the gross area or adjusted area of the benefited properties, both present and future, as determined in the project design. 3. Assessable Cost: The assessable cost shall be 100% of the total project cost for new or expanded storm drainage improvements, and up to 50% for reconstruction, based on the chart below. 4. Length of Assessment: The assessment period for sanitary sewer improvements, including new construction and replacement projects, is a maximum of twenty years. Reenn.4rijefinn AcCPCCmentC — V%tnrm qi-wpr Years After First Assessment Levied 1 City Share2 Assessed Share2 0-20 years 100% 0% 20-40 years 75% 25% Over 40 years 50% 50% IFirst assessment refers to the original assessment for proper-ties developed or platted at or before the time the improvement is constructed, or to the deferred assessment for properties developed or platted after the improvement is constructed. 2 Percentage based on project construction cost. The assessed share of the project cost, as listed in the above table, will be apportioned against the benefiting properties. The City Engineer will use standard procedures to determine the Page 10 of 19 benefiting property for each specific project. 5. Assessment Formula for Replacement: The cost split for replacement of storm sewers, lift stations, and miscellaneous drainage improvements, if they are to be assessed, will be assessed in the same manner as sanitary sewer replacement as shown above. 6. Length of Assessment: The assessment period for storm sewers, lift stations, and--------- -- - - - - Formatted: Justified, Indent: Left: 1.07" miscellaneous drainage improvements is amaximum oftwenty years. Hanging: 0.25° Formatted: Font: 12 pt, No underline, Font •--------------------------------------------- - - - - -- - - - - -------------------------------------------------------- 6: Where improvements are designed to serve an area beyond that of direct color: Custom Color(RGB(35,35,35)) benefit, the City may defer that portion of the assessment and fund it as a system cost. 4. New Street Construction The City's general policy and practice is to require new residential street construction during land use development applications to be constructed to City standards by the developer /applicant with no special assessments or public bonding support. 5. Street Reconstruction, Rehabilitation, and Mill and Overlay a. Reconstruction and Rehabilitation - The assessable cost of street reconstruction and street rehabilitation projects shall be determined by the benefit to properties affected by the project determined through a letter of benefit or similar from a licensed appraiser. The assessment shall be 90 percent of the median value of the benefit. For example, if the benefit for a direct access property was valued from $12,000415,000 per unit, the assessment would be $12,150 ($13,500 x .9 = $12,150). If the benefit for an indirect access property was $3,000 - $5,000 per unit, the assessment would be $3,600 ($4,000 x .9 = $3,600). The method of assessment shall be based on per unit. The remaining cost shall be a City cost. 1. For properties with access to the street receiving a reconstruction or rehabilitation, each existing unused development right and newly created development right resulting from the project will be assessed an amount equal to the assessment of a direct access property. 2. Landowners receiving assessments for existing unused development rights and newly created development rights may have the option of paying the entire assessment in one lump sum or through deferral until time of plat with no accrued interest during the period of deferral. Assessments will be filed with the County Recorder. b. Mill and Overlays - The assessable cost of overlays and mill and overlays shall be determined by the benefit to properties affected by the project determined through a letter of benefit or similar from a licensed appraiser. The assessment shall be 90 percent of the median value of the benefit. For example, if the benefit was valued from $1,500- $2,500 per unit, the assessment would be $1,800. The method of assessment shall be based on per unit. The remaining cost shall be a City cost. 1. Exception: The City has completing initial overlays on roads without assessments, the following roads will receive one overlay without an assessment in order to complete the existing program, if the road is improved to a higher standard instead Page 11 of 19 of an overlay the exception no longer applies: Bluestem Trail, Cates Longhorn Road, Chisolm Trail, Country Circle, Country Road, Hage Drive, Heather lane, High Bluff Lane, Hunters Ridge, Jackie Lane, Jubert Lane, Julie Ann Drive, Larkin Road, Maple Hill Road, Meadow Creek Drive, Mohawk Road, Oswald Farm Road, Pioneer Trail, Robert Lane, Rolling Hills Road, Rush Creek Drive, Schutte Farm Road, Sunnyhill Road, Sunset Lane, and Windmill Drive. c. Length of Assessment - The assessment period for street improvements is a maximum of twenty years. 6. SIDEWALK The front footage or unit cost method shall be the basis for assessment. The assessable cost for sidewalk improvements shall be 100% for both new construction and reconstruction up to 5 feet wide. Sidewalk maintenance and rehabilitation shall be repaired or replaced to the original standard and is the responsibility of the abutting property owner. 7. DRIVEWAY APPROACHES Driveway approaches from shall be part of the overall project and not assessed separately. The improvement to driveway approaches should be considered as the amount of benefit is established. D. Deferred Assessments for Green Acres In cases where improvement projects are determined to benefit properties that have been certified to qualify for Green Acres exemption, the City will determine that portion of the project cost that benefits those properties, and finance that portion of the project cost as a system cost. Landowners of benefiting properties may have the option of paying the entire assessment in one lump sum or through deferral as allowed by Minnesota Green Acres statutes. Once the benefiting properties no longer qualify for Green Acres status, the City may recover the system cost. Interest will not be accrued during the period of deferral if assessed on a Green Acres parcel. Assessments against Green Acres parcels will be filed with the CountyRecorder. E. Deferred Assessments for Undeveloped Property -------- Formatted: List Paragraph, Numbered + Level: 2 + Numbering Style: A, B, C, ... + Start at: 1 + Alignment: Left +Aligned at: 0.33" +Indent In the Council's discretion, the City may, at the meeting in which the Council approves an at: 0.58" levy the assessment but defer the first installment of the assessment for ` assessment, � Formatted: List Paragraph, Left, Indent: Left: unimproved property until a designated future year, or until the platting of the property or the 0.5811, First line: 0" construction of improvements. However, all deferred assessments must be paid within 30 years of the assessment levy. The City Council may set, by resolution, terms, conditions, standards, and criteria for the deferral and future payments. Assessments deferred pursuant to this section shall not accrue interest during the period of deferral. The City shall file a certificate with the county recorder stating the he legal description of property subiect to deferred assessments, and the amount of the deferred assessments. The City shall include all benefitted property in the assessment proceedings. including those properties on which it determines to Formatted: Font color: Custom defer assessments. ------------------------------------------------------------------------------------------- - - - - -- Color(RGB(65,65,65)) Page 12 of 19 &F. Determination of Assessment Rate and Terms 1. Interest Rate on Assessments: The City will charge interest on special assessments at a rate specified in the resolution approving the assessment roll. If bonds were sold to finance the improvement project, the interest rate shall generally be one percent (1.0 %) more than the average rate of the bonds, rounded to the nearest quarter of a percent. If no bonds were sold, the interest rate shall be set using the same formula based on the current bond market. 2. Length of Assessment: The assessment period for all improvements is subject to the requirements of the bond market at the time of project financing and thus may vary in length from the time periods proposed. RG. Undeveloped Property The City shall require the developer, owner or sub - divider of any property within the City's corporate limits desiring to install street, curb and gutter, sidewalk, sanitary sewer or water main improvements to follow the City's subdivision ordinance, in addition to the following: 1. Upon written request by a developer, the City Council shall give consideration to the preparation of a feasibility report to determine the feasibility of construction for the desired improvements. The developer will prepare a plan and other such information, as the Council requires, prior to the Council making a decision on the request. 2. The developer and /or the property owner are required to sign a Developer's Agreement and Petition and Waiver Agreement. in a form acceptable to the City. prior to awarding a contract. 3. At the completion of an improvement, all improvement costs will be recorded or certified to the County per the Developer's Agreement GM. Petitioned Improvement Pro_iiects The City will consider petitioned improvement projects. However, the need for specific projects shall be determined based on engineering standards (e.g. the existing condition represents a physical or structural hazard, or is no longer cost - effective to maintain, etc.) as determined by the City Public Works Superintendent and City Engineer and approved by the City Council. The City may consider the following information in approving or denying the petition: comprehensive cost of the project; cost to individual properties; demonstrated need for the project; existing site conditions of the proposed project; geographic scope of the project area, and any other information the City deems relevant. The City Council has the authority to initiate non - petitioned improvement projects, if it is felt the improvements are in the best interest or safety of the citizens. Page 13 of 19 Special Assessment Procedures Purpose: This procedure is for internal purposes to summarize statutory and administrative requirements with respect to special assessments. Changes occur statutorily on an annual basis and administratively through Council direction and administrative review on an on -going basis. Verification of any changes needs to occur prior to utilizing this document as those changes may supersede the contents of this document at the time of approval. Procedure: I. Initiation of Proceedings Either a petition from affected property owners or the Council initiates Minnesota State Statute chapter 429 proceedings. A. By Petition: If the Council chooses to proceed with an improvement based on a petition it must have the signatures of the owners of at least 50 �ercen(in_ frontage -of -the property __, -- comment [JT1]: 35% is the minimum per bordering the proposed improvements. 429.031, but the City can require more if it desires. B. By Council: The Council may act on its own initiative in proposing a local improvement and ordering a feasibility report. The Council must calculate the cost of the improvement or direct staff to do so. II. Feasibility Report Whether initiated by petition or by Council, Chapter 429 requires that the city engineer, or another person with similar skills, prepare a feasibility report. The feasibility report must cover such factors as whether the project is necessary, the availability of money in the general fund to pay the city's share of the cost, an estimate of that cost, whether the improvement is cost effective, and any other information necessary for Council consideration. The feasibility report must also include the estimated cost of the improvement as recommended. Since a reasonable estimate of the total amount to be assessed and a description of the methodology used to calculate individual assessments for affected parcels must be available at the hearing it could be part of the commissioned report. The feasibility report is integral to the assessment process. Best practice suggests that the City Council pass a resolution receiving the report and provide preliminary notice of the improvement. Ill. Initial Considerations The law requires two public hearings commonly known as an improvement hearing and an assessment hearing; in between these two public hearings Council may order the improvement, decide how to construct the project and tabulate an assessment roll. A. Determining Benefit Districts: Determining what area benefits from improvement projects, or the area against which the City will levy assessments, is a major policy decision for the City Council. The benefit district varies with the kind of improvement. Page 14 of 19 For some improvements, such as a water tank, the area benefited might be very large. In levying an assessment to finance the tank's construction the Council might assess the entire area the tank services. The special benefit test still applies. City staff, consulting engineers and attorneys may provide the basis for Council to determine what area or district to assess for a specific improvement because that area benefits from the improvement. B. City's Share: At any time before or after the City actually incurs expenses for the improvement, the Council must pass a resolution determining how much the City plans to pay and separate that from amounts to be assessed. Best practices suggest the Council work with an appraiser and an attorney to determine the appropriate City share of a particular project. The City has adopted a policy to address the methodology of the assessment calculations. C. Non - abutting Property: The Council may wish to levy assessments against adjacent, non - abutting properties if the properties benefit from the improvement. D. Service Laterals: City utility ordinance requires that property owners maintain private water and sewer service laterals. When an improvement project requires new service laterals the City may require that property owner to install or replace them. E. May Omit Improvement Hearing: The Council may omit the improvement hearing if 100 percent of the affected landowners sign the petition requesting the improvement. If the landowners are not paying 100% of the project costs the City will consider holding both public hearings. F. Two or More Simultaneous Local Improvements: When the City proposes undertaking two or more local improvements simultaneously the City does not need to issue separate notices and hold separate improvement hearings on different dates. The notice will describe each improvement separately, stating the estimated cost for each one and noting • n�� � held- n�tor -the �r� that there will be a sepal to address;��� _ _ _ _ _h�� -each- . - - Comment []T2]: This is fine but not required. ------------------------------------------ - - - - -- --- - - - - -- improvement. You can hold one hearing or do so separately. IV. Prepare for the Improvement Hearing The purpose of the first hearing is for the Council to discuss a specific local improvement before ordering it done. The Council considers all the information in the feasibility report and any other information necessary for Council deliberation. A. Publish Notice of the Improvement Hearin The City must publish notice of the initial public hearing on the proposed project twice in the official newspaper, stating the time and place of the hearing, the general nature of the improvement, the estimated cost, and the area proposed to be assessed. The notices must appear at least one week apart. At least three days must elapse between the last publication date and the date of thehearing. B. Mail Notice of the Improvement Hearing_The City must mail a notice once to each property owner in the proposed assessment area, at least 10 days prior to the improvement hearing that states the time and place of the hearing, the general nature of the improvement, the estimated cost and the proposed assessment area. The notice must also contain a statement that a reasonable estimate of the cost of the assessment will be Page 15 of 19 available at the hearing. The City will diligently make every effort to notify citizens about assessment proceedings. According to statute, failure to give mailed notice of the improvement hearing will not invalidate subsequent assessment proceedings. Notice to other governmental entities must be sent out at least two weeks before the improvement hearing, by registered or certified mail to the head of the instrumentality, department or agency having jurisdiction over the property. V. Improvement Hearing At the improvement hearing, interested persons may voice their concerns, whether or not they are in the proposed assessment area. A reasonable estimate of the total amount to be assessed and a description of the methodology used to calculate individual assessments for affected parcels must be available at the hearing. If the Council rejects the project, it may not reconsider that same project unless another hearing is held following the required notice. The Council must prepare a record of the proceedings and make written findings. The Council may adjourn and subsequently continue the improvement hearing. To provide proper notice, before the improvement hearing is adjourned, the Council must state on record, the date, time and place of the continuation of the improvement hearing, if any. VI. Ordering theImprovement A resolution ordering the improvement may be adopted at any time within sire months after the date of the improvement hearing. A. Vote Requirements for Ordering the he Improvement: If the improvement is made pursuant to a legally sufficient petition from property owners, the Council adopts the resolution by a simple majority vote of all members of the Council. If there is not a petition, adoption requires a 'super - majority' vote, meaning the council can only adopt the resolution by a four - fifths vote of all members of the Council. B. Time Limits for Local Improvements: The resolution ordering the improvement may be adopted at any time within sire months after the date of the improvement hearing. Either arrangements for day labor or a contract must be made within one year of adopting the resolution ordering the improvement, unless the Council specifically states a different timeframe in the resolution ordering the improvement. VII. Competitive Bidding The law permits the Council to carry out, in advance of the assessment hearing, all the steps prior to, but short of, actually issuing of a contract for the improvement. Thus, if the Council wishes to provide firm estimates of costs at the hearing, it may, in addition to the required preliminary report, prepare completed plans and specifications, advertise for bids, and open and tabulate them before the assessment hearing. Once the Council orders a public improvement, staff or consultants prepare the necessary plans and specifications and the Council either: • Contracts for all or part of the work to be performed by outside parties, or • Orders all or part of the work to be done by city staff and contracts for any necessary materials and equipment. In either case, contracting law applies. The City Attorney should coordinate the Page 16 of 19 contracting process in combination with the special assessment process. VIII. Prepare the Proposed Assessment Rolls The City Clerk, with the assistance of the engineer or other staff prepares the proposed assessment rolls. The proposed assessment cannot exceed the increase in market value accruing to the property as a result of the public improvement project. Road Assessment Calculations Components: A. Future Lots within the Combined Method Calculation: The maximum potential parcels are calculated with the current zoning. B. Cemeteries: A cemetery cannot be assessed in accordance with State Statute. C. Right of Way: Parcels that are entirely right of ways will not be assessed. D. Rounding_ Calculation of assessment will need to be adjusted due to rounding. Practice is that $.01 per parcel will be adjusted either positively or negatively beginning with the last parcel listed. IX. Prepare for the Assessment Hearing The purpose of the second hearing is to give property owners an opportunity to express concerns about the actual special assessment. The Council will pass a resolution setting the date and time of the assessment hearing and direct the -City Clerk to publish -and mail notice about the assessment hearing. A. Publish Notice of the Assessment Hearing_At least once and at least two weeks before the assessment hearing, the City must publish notice of the hearing in the city newspaper. The published notice must include the hearing time, date, place, overall project description, area to be assessed, total cost of the improvement, a description of a landowner's right to appeal the assessment, and any deferment options, if available. B. Mail Notice of the Assessment Hearing_At least two weeks before the hearing the City must mail notice of the hearing to each affected property owner. This mailed notice must include the amount of the special assessment against the individual parcels,a description of the landowner's right to appeal the assessment, possible prepayment provisions, and the interest rate on the assessments. Failure to comply with the requirements for published and mailed notice invalidates the assessments. The Clerk will execute an affidavit attesting to the mailing to property owners. X. Assessment Hearing The assessment hearing may be adjourned and continued to another time. If the assessment hearing is adjourned. proper notice shall be ig ven. stating for the record, the date, time and place of the continuation of the hearing. A. Resolution Adopting Assessment Roll: At the assessment hearing the Council shall hear and consider all objections to the proposed assessment, whether presented orally or in Page 17 of 19 writing. The Council may change or amend the proposed assessment as to any parcel. Council must by resolution adopt the special assessment against the lands named in the assessment roll. Once the assessment roll is adopted the assessments are set and become liens against the properties listed. The Council must prepare a record of the proceedings and written findings as to the amount of the assessment roll- at this hearing. B. Council Decides Interest of Special Assessments: Special assessments may bear interest at any rate the Council determines. In setting the rate the Council should make sure there is a reasonable relationship between the assessment interest rate and the bond interest rate if the City is issuing bonds to finance the project. If the city finances the project with funds on hand without using bonds, the Council will want to look at the interest rate the City would otherwise have earned on the funds. C. Council Decides Payment Timelines: The Council must also decide the number of years over which the property owners may pay the assessment. The statutes permit payment over a period of not more than 30 years. XI. Sending of Final Notice The law does not require that the City send final notice of assessment to property owners if the amount assessed is the same as that listed in the previously mailed assessment hearing notice. The City chooses to notify property owners of all final assessment amounts whether they differ from the proposed assessment or not. Staff will also notify owners by mail the interest rates and prepayment requirements as stated in the proposed assessment notice. XII. Certification of Special Assessment Rolls The City Clerk must certify the assessment rolls to the County Auditor by November 30. The Assessment Rolls need to be accompanied by Council Resolution, certificate with the city seal signed by the City Clerk and a rate card. The County Auditor spreads the assessment every year for collection with taxes. XIII. Payment of Assessments and Interest Property owners initially have two options regarding their assessment. They can either pay the total amount of their assessment immediately, or pay the assessments in annual installments with interest under the terms set by the Council. The property owner can: • Pay the entire amount of the assessment within 30 days after the Council adopts the assessment rolls with no interest. • Pay the entire amount any time after 30 days, but before any certification has been made to the County Auditor with interest accrued to the date of payment. • Any time after the certification the property owner may still pay the entire remaining unpaid amount to the City. The property owner must pay the entire remaining unpaid amount of the assessment before November 15 of any year and must also pay all interest accrued until the end of that calendar year. If the property owner elects not to pay the entire amount of the assessment at once, they may pay it in annual installments spread over the number of years the Council has allowed Page 18 of 19 including interest calculated at the rate established by the Council. TI% Postponed IA Qoessmnn♦ , I LL��17 L- ---------------------------------------- _- ■ __- Comment [7T3]. See my comment above. `v the the ifflff0s,,ement kit, would be.- COSt Of ldleulllavys aSSe_S7S)1x1_LjLt":1 Jit situations n', fir i»>f,d.Hnn it in th - fa ur . available sites The C,T3� P-nnnot imry eadint�j� n tFunk main l-,nr+ause ofvarious -easo c X' -.XIV. Deferred Assessments Deferred assessments are certified to the County Auditor but collection is deferred. All deferred assessments constitute liens on the property and must be paid within 30 years of the assessment levy. Property owners may request deferment provided the property owner or the property meets certain criteria. The three types of authorized deferrals are 1) undeveloped property, 2) senior citizen,- permanent and total disability. and military service (deferral, and 3) Ggreen Aacre deferral. Interest on the assessments discussed -_ - -- Comment [JT4]: 911 addressed above on p.12. If _ ---------------------------------------------------------- -------- - - - - -- subsequently, may be paid or deferred, except that if the assessment deferral is for - the City wants to authorize deferral 92, it must adopt a separate ordinance establishing the when and how undeveloped property or for Green Acres property, no interest shall accrue durin 2 the such deferrals may be granted. Also, if this is the period of the deferral. . If interest is deferred with the assessment it will be computed on a City policy, the City must disclose that it does so in every notice of proposed assessment. #3 is already compounding basis. addressed by the policy and state statute. A. Notice of Deferred Assessments: The City will record deferred special assessments with the County Auditor. The certificate of the deferred assessment will contain the type of deferral. B. Interest on Deferred Assessments: Property owners may pay interest (if applicable) either annually during the period of deferment, or when the assessment becomes payable. If interest is deferred with the assessment it will be computed on a compounded basis. Page 19 of 19 Page 1 of 19 Special Assessment Policy Purpose: The City's special assessment policies and procedures have been established to: 1. Provide a stable and continuing source of funding within the financial capacity of the City, in combination with federal, state, county, and other local financial resources available to the City, to accommodate infrastructure needs for new development, redevelopment, and maintenance within the existing community in the most cost-effective manner. 2. Balance needs and costs for new and existing infrastructure to support and promote economic development and growth as well as maintenance within the existing community by providing for the equitable distribution of infrastructure costs to ensure that specific developments are financially self-supporting to the extent warranted. 3. Provide a comprehensive, well-constructed and well-maintained infrastructure system that services individual properties and takes advantage of economies on a regional scale and flexibility in the timing of infrastructure development. 4. Respond to community needs and desires for health, safety, welfare; accessibility, and mobility provided by new infrastructure and the maintenance of existing infrastructure. 5. Function in harmony with the City's comprehensive plan and growth area plans by providing the infrastructure and amenities associated with those plans thereby promoting orderly growth in areas where services are available or can be provided at the most reasonable cost. 6. Provide the City Council and staff with guidelines and methods to efficiently distribute infrastructure costs to benefiting properties in an equitable and consistent manner thereby enhancing the value of property by assigning a proportionate value of the improvements to the properties deriving benefit from the improvement. General Policy Statement: While the special assessment purposes, policies and procedures have been identified herein, the City Council may deviate from this policy when such rationale in equity arises or the law is required. I. Policy Definitions: A. Adjacent Property: A property directly adjacent to public improvements. Page 2 of 19 B. Access: Properties shall be considered to have access to public street improvements when they may enter onto the improvement from their own private driveway, private road, or public street, or when the street classification would allow the property to be granted driveway access. Properties shall be considered to have access to underground utility improvements when they directly abut the property or may be available to the property by utility or road easement/ROW, and the City has included the property within a defined services area approved for immediate utility service. C. Accrued Interest (or Compounded Interest): Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. D. Adjusted Area: An area of a benefited property that has been modified by an adjustment factor to more accurately represent the true benefit that property receives from an improvement in comparison to other properties in the assessment area. The adjustment will be based on the improvement design parameters that are applicable to that parcel, as approved by the City Council. Design parameters that may be used to determine the adjustment factor include, but are not limited to, trip generation, storm water runoff coefficients, water or sanitary sewer use, needed fire flow, and zoning or future land use. E. Assessed Cost: Those costs of public improvements that have been determined to benefit specific properties. The assessed cost will be equal to the project cost minus the City cost. Project costs eligible for assessment include all costs associated with the improvements, including, but not limited to, land acquisition, demolition, construction, administration, engineering, legal, financing and other costs as determined by the City Council. The financing charges include all costs of financing the project. These costs include, but are not limited to, financial consultant's fees, bond attorney's fees, and capitalized interest. F. Assessable Footage: The assessable footage is the total front footage of all of the benefiting properties, calculated by using the front footage method. ( G. Assessment Rate: The assessment rate for improvements other than streets is determined by dividing the assessable cost of an improvement by the total number of assessment units such as the total adjusted front footage or square footage, acreage, number of lots, or number of parcels. H. Assessment Unit: Front footage, area, or unit used to compute the costs on the basis of individual assessments. I. Benefit: The increase in property value as a result of a public improvement such as a street, sidewalk, trail, curb and gutter, water main, sanitary sewer, storm sewer, park, or street landscaping. Page 3 of 19 J. Deferment: A process of postponing the collection of the cost of public improvements and funding them as a system cost with the intention of collecting the cost at a later date. K. Driveway Approach: That area which lies between the existing pavement to the right- of- way line; curb cut to curb cut. For assessment purposes driveway approach refers to the road surfacing, not stormwater conveyance such as ditching or culverts. L. Front Footage: The distance measured along the right-of-way line that directly abuts an improvement, not counting Side-Lot Footage. M. Limited Access Street: A street, such as a major or minor collector street, which because of its high volume of traffic has been designated by the City for controlled access, meaning the number of access points to the street will be limited. N. Lot Definitions: 1. Corner Lot: A lot located at a street intersection having both front and side-lot footage. 2. Double Frontage Lot: A lot with access to two separate non- intersecting or intersecting streets but not a corner lot. 3. Irregularly Shaped Lot: Those lots abutting curved streets, cul-de- sacs, or other lots where there is more than five feet of difference in length between the front and back lot lines. 4. Rectangular Lot: A lot with less than five feet of difference in length between the front and back lot lines. O. Public Improvement: Improvements as allowed by State statute that provide a special benefit to properties, including but not limited to stre ets, sidewalks, trails, curb, gutter, sanitary sewer systems, storm sewer systems, water treatment and distribution systems. P. Special Assessment: A legal process whereby the benefited property is charged for all or a portion of the cost of public improvements. Q. Standards for Surface Improvements: Standards for surface improvements have been established in the City's Engineering Standards. R. Street: All public ways designed as means of access to the adjoining properties. Streets are classified into six groups and classified per a Collector or Local street status in the City's Comprehensive Plan: 1. Local Gravel – Local gravel streets have lower traffic counts as compared to collector gravel streets, have a gravel finish, and utilize rural ditches for stormwater conveyance. Examples include, but are Page 4 of 19 not limited to, Hidden Ponds Drive, Meadow Circle, Nystrom Lane, Rush Meadow Lane, and Treeline Drive. 2. Collector Gravel - Collector gravel streets have higher traffic counts as compared to local gravel streets, have a gravel finish, and utilize rural ditches for stormwater conveyance. Examples include, but are not limited to, Trail Haven Road, Cain Road, Bechtold Road, Old Settlers Road, and Willow Drive. 3. Rural Local Asphalt – Rural local asphalt streets have a bituminous finish and utilize ditches for stormwater conveyance. E xamples include, but are not limited to, Cates Longhorn Road, Abilene Lane, Butterworth Lane, Hunter Road, and Dassel Lane. 4. Urban Local Asphalt – Urban local asphalt streets have a bituminous finish and utilize curb and gutter for stormwater conveyance. Examples include, but are not limited to, Bridle Path, Carriage Way, Prairie Sage Lane, and Sorrel Court. 5. Rural Collector Asphalt – Rural collector asphalt streets have higher traffic counts than local streets, have a bituminous finish, and utilize ditches for stormwater conveyance. Examples include, Oakdale Drive. 6. Urban Collector Asphalt – Urban collector asphalt streets have higher traffic counts than local streets, have a bituminous finish, and utilize curb and gutter for stormwater conveyance. Examples include, Gleason Parkway. S. Street Treatment Definitions: 1. Crack Seal and Seal Coat - Crack sealing involves patching and sealing cracks in the roadway. This is followed by seal coating, which involves spraying the road with oil and covering it with a layer of small rock. Crack sealing and seal coating is generally considered routine roadway maintenance. The recommended interval is 6-8 years with first application about 7 years after new roadway construction. 2. Mill and Overlay - Milling and overlaying consists of grinding off the upper layer of asphalt (in urban sections) and replacing it with a new layer of asphalt. This is generally done on roadways that have a fair amount of cracking and other surface distress, usually at about 60% of the street's life cycle. This is considered a structural improvement that will renew the street surface and extend its useful life. 3. Rehabilitate - Rehabilitating a roadway consists of grinding up the existing Page 5 of 19 asphalt and mixing it with a portion of the underlying gravel base (typically 4"- 8"). This combination of bituminous and gravel is then used as the new road base, and a new asphalt surface is paved over this. This is generally done on roadways that have a significant amount of distress. This can be a good alternative to reconstructing a road if the existing road base appears to be structurally sufficient. 4. Reconstruct - Reconstructing a roadway includes improving a gravel road to a paved road or completely removing the existing road and underlying gravel and sand base material, and constructing a new road section. This may also include correcting any poor base material beneath the section, or updating the road to meet design standards such as width and drainage. This is often done in conjunction with utility repairs/replacement. Generally done on roadways that exhibit signs of major distress, such as rutting, cracking, and potholes. T. System Cost: That portion of the assessable cost that benefits properties whose assessments are deferred because they qualify for green acres status, are located outside of the City limits, or are unable to make use of the improvements due to factors beyond their control. The City may reimburse itself for such system costs from the benefitting properties when the basis for the deferral is no longer valid. U. Unit: A unit, for purposes of defining an assessment, may include, but is not limited to: a household; a parcel/lot; water or sewer main length and size; sidewalk or trail length, width and depth; driveway approach length, width and depth. II. Policy Implementation and Procedures: A. Assessment Classification The assessment process shall address the feasibility of physical construction and also the affordability of the improvements. In meeting these responsibilities, a classification system is established below for public improvement projects based on the design capacity and the level of use. Cost apportionment is based on the extent of use of the improvement by the benefiting property owners and City policies for street paving, curb, gutter, and sidewalk construction shall be used as a basic guide. The classification system groups improvements into the three categories: • Type I improvements consist of projects that are mostly of benefit to the abutting properties and include local streets, curb, gutter, water and sewer services, and driveway improvements. Street construction, sidewalk, paving, storm sewer, sanitary sewer, and water mains may be Type I if solely designed to serve the abutting properties. • Type II improvements consist of projects that benefit a larger, yet definable, area. Street construction, sidewalk, paving, storm sewer, sanitary sewer, and water mains may also be Type II if the improvement benefits a larger area. Collector streets, which are likely to be used by a broader segment of the public, should be proportionately assessed to a larger area. Page 6 of 19 • Type III improvements consist of large-scale projects of benefit to the entire City regardless of location. The criteria for designation of any improvement as Type III are facilities that serve areas larger than a definable neighborhood or those areas separated by major identifiable barriers, such as creeks, or county roads. Typically, Type III improvements are financed through a combination of Federal and State appropriations and available City funds; however, special assessments may be needed to fully fund the project. If financial assistance is received by the City from the Federal Government, from the State of Minnesota, the County, or from any other source to defray a portion of the costs of a given improvement, such aid will be used first to reduce the "City cost" of the improvement. If the financial assistance received is greater than the normal "City cost", the remainder of the aid will be applied according to the terms of the assistance program or at the Council's discretion. The assessment classifications are listed in Table 1 below. The City Council may from time to time adjust the classification of improvements to maintain the equitability of the assessment cost. Table 1. Assessment Classification Type I Improvements Type II Improvements Type III Improvements Curb & Gutter Trunk Sanitary Sewers (greater than 8" diameter) Bridges Sidewalks and trails, 5 feet wide or less Trunk Water Main (greater than 8" diameter) and Looped Water Main Community Facilities Library Law Enforcement Fire Station Sanitary Sewer Laterals (less than or equal to 8" diameter) Collector Streets Water Main (less than or equal to 8" diameter) Sidewalks and trails, greater than 5 feet wide Community Parks Sewer & Water Services Storm Drainage Improvements Wastewater Treatment Facilities Local Streets/Alleys Pumping Stations Water Tower Storm Drainage Improvements Water Treatment Plant Other improvements mandated or authorized by law B. Methods of Assessment The City shall use the following methods in determining assessments for public improvements. Page 7 of 19 1. Front Footage Method This method computes the assessable frontage for the project and for each property. The assessment rate is obtained by dividing the total assessable cost by the assessable footage in an assessment district. The assessment for each parcel is then obtained by multiplying the assessment rate times the front footage for each property. Front footage is determined as follows: a. For rectangular lots, the front footage shall be the same as the front footage at the right-of-way. b. For irregularly shaped lots, the front footage will typically be calculated as the width of the lot as defined in the City's zoning ordinance, although other methods may be used at the City's discretion (such as average lot width) if they are determined to be more equitable. c. For all corner lots, street assessments, regardless of the orientation of the house, shall be based on one-half of the footage of the road being improved. d. For a rectangular corner lot, water and sewer assessments, regardless of the orientation of the house, the short side of the lot shall be considered to be the "frontage". e. Double frontage lots may be assessed for any street improvement that it has direct access to, if the lot is of such size that it could be split into multiple buildable lots. The front footage for each improvement will be determined in accordance with the above- described policies, whichever is appropriate. 2. Area Method This method computes cost on a square foot or acreage basis. The assessment rate is determined by dividing the total assessable cost by the total benefiting area. A parcel's assessment is then determined by multiplying the assessment rate times the benefiting area of the parcel. When the benefiting area includes both platted and un- platted properties, the gross benefiting area will be used to apportion the benefit among the properties. An adjustment factor reflecting land use may be applied to a parcel's benefiting area in some cases. For example, for storm sewer design, the assumed rate of runoff per acre from a commercial lot is greater than the runoff rate from a residential lot. If all uses are the same in a project area (single family, multi- family, commercial, or industrial), the assessment rate is the same for all. Where there is variation in residential density or uses, the assessment rate may be adjusted to reflect the corresponding differences in benefit. The assessable area shall include all properties legally eligible for assessments. The following items may not be included in area calculations: public right-of-ways, natural waterways, lakes or other wetlands. 3. Unit Method This method computes the costs on the basis of individual assessment units. For example, sewer and water services, sidewalks, trails, and driveway approaches are typically considered separate individual units. The total project cost is divided by the total number of assessment units to calculate the fixed cost. Assessment units could be determined on a per lot or per unit basis, or any combination thereof. For lots that may be further Page 8 of 19 subdivided, the City may determine the number of assessable units based on the number of equivalent lots that could be created from a particular parcel. 4. Combination Method This method involves using one or more of the above defined methods to more equitably calculate assessments. The combination method may be considered when there is varying land use, undeveloped properties available for future development, or other circumst ances involving the defined public improvement that may provide assessment inequities. C. Determination of Assessable Costs, Rate and Term 1. Water System a. Water Mains: The assessable cost for installing new water main improvements shall be based on the level of service required by the property. In residential areas, 100% of the cost of installing water main that is 8 -inches in diameter or less shall be assessed to the benefiting properties, and up to 50% for reconstruction, see chart below. In commercial areas, 100% of the cost of installing new water main and 50% of the cost of reconstruction will be assessed, based on current design standards. The cost of over sizing the water main for general distribution purposes shall not be assessed. Where larger diameter water mains are required to serve commercial, industrial or institutional properties, the increased cost of water main installation shall be assessed to those properties. Where improvements are designed to serve an area beyond that of direct benefit, the City may defer that portion of the assessment and fund it as a system cost. Reconstruction Assessments – Water System Years After First Assessment Levied1 City Share2 Assessed Share2 0-20 years 100% 0% 20-40 years 75% 25% Over 40 years 50% 50% 1First assessment refers to the original assessment for properties developed or platted at or before the time the improvement is constructed, or to the deferred assessment for properties developed or platted after the improvement is constructed. 2Percentage based on project construction cost. The assesse d share of the project cost, as listed in the above table, will be apportioned against the benefiting properties . The City Engineer will use standard procedures to determine the benefiting property for each specific project. b. Water Services: The assessable cost for the construction or replacement of water services shall be 100% of the project cost. The unit cost method will be used to calculate the assessment. c. Length of Assessment: The assessment period for sanitary sewer improvements, including new construction and replacement projects, is a maximum of twenty years. Page 9 of 19 2. Sanitary Sewer Sanitary Sewer Assessments shall be based on engineering design standards. The assessable cost for installing sanitary sewer improvements shall be based on the type of service required by the property. In residential areas, 100% of the cost of installing new sanitary sewer that is 8-inches in diameter; and up to 50% for reconstruction, shall be assessed to the abutting properties. Where larger diameter sanitary sewers are required to serve commercial, industrial or institutional properties, the increased cost of installation shall be assessed to those properties. Where improvements are designed to serve an area beyond that of direct benefit, the City may defer that portion of the assessment and fund it as a system cost. a. Sanitary Sewer Assessment Formula: Assessments to be levied against properties within the benefited area shall be distributed to those properties on the basis of the following provisions: 1. Assessment Rate: The assessment rate shall be equal to the "assessable cost" of the improvement divided by the total number of assessable units benefited by the improvement. Projects having an uneven distribution of benefits may be subdivided into separate improvements using multiple assessment methods and rates to more equitably apportion the assessments. 2. Assessable Units: The assessable units shall be determined as follows: i. Lateral Sewers. The assessment method shall be the "unit method", unless otherwise specified by the Council. ii. Trunk Sewer and Lift Station. Trunk fees shall be charged as outlined in City Code, Chapter 51: Regulating Public Sanitary Sewer and Water Within the City of Corcoran. iii. Sewer Services. The assessable cost for the construction or replacement of sewer service lines shall be 100% of the project cost. The assessment shall be based on the number of sewer services installed for each individual property. This is the unit cost method of assessment. 3. Assessment Formula for Replacement: The following table shows the cost split for replacement of sanitary sewers (trunk sewers, lateral sewers, and lift stations), if they are to be assessed. Reconstruction Assessments – Sewer System Years After First Assessment Levied1 City Share2 Assessed Share2 0-20 years 100% 0% 20-40 years 75% 25% Over 40 years 50% 50% 1First assessment refers to the original assessment for properties developed or platted at or before the time the improvement is constructed, or to the deferred assessment for properties developed or platted after the improvement is constructed. Page 10 of 19 2Percentage based on project construction cost. The assessed share of the project cost, as listed in the above table, will be apportioned against the benefiting properties. The City Engineer will use standard procedures to determine the benefiting property for each specific project. 4. Length of Assessment: The assessment period for sanitary sewer improvements, including new construction and replacement projects, is a maximum of twenty years. 3. Storm Sewer Storm sewer improvements shall be classified to include all storm sewer, storm sewer pumping stations, culverts, ditches, rain gardens, swales, street grading and any other improvement, which will facilitate drainage. The assessment for the construction of storm drainage improvements shall be based on the level of service required by the property. a. Storm Sewer Assessment Formula: Assessments to be levied against properties within the benefited area shall be distributed to those properties on the basis of the following provisions: 1. Assessment Rate: The assessment rate shall be equal to the assessable cost of the improvement divided by the total number of assessable units benefited by the improvement. Projects having an uneven distribution of benefits may be subdivided into separate improvements using multiple assessment methods and rates to more equitably apportion the assessments. 2. Assessable Units: The assessable unit, unless otherwise specified by the Council, shall be the gross area or adjusted area of the benefited properties, both present and future, as determined in the project design. 3. Assessable Cost: The assessable cost shall be 100% of the total project cost for new or expanded storm drainage improvements, and up to 50% for reconstruction, based on the chart below. 4. Length of Assessment: The assessment period for sanitary sewer improvements, including new construction and replacement projects, is a maximum of twenty years. Reconstruction Assessments – Storm Sewer Years After First Assessment Levied1 City Share2 Assessed Share2 0-20 years 100% 0% 20-40 years 75% 25% Over 40 years 50% 50% 1First assessment refers to the original assessment for properties developed or platted at or before the time the improvement is constructed, or to the deferred assessment for properties developed or platted after the improvement is constructed. 2Percentage based on project construction cost. The assessed share of the project cost, as listed in the above table, will be apportioned against the benefiting properties . The City Engineer will use standard procedures to determine the benefiting property for each specific project. 5. Assessment Formula for Replacement: The cost split for replacement of storm Page 11 of 19 sewers, lift stations, and miscellaneous drainage improvements, if they are to be assessed, will be assessed in the same manner as sanitary sewer replacement as shown above. 6. Length of Assessment: The assessment period for storm sewers, lift stations, and miscellaneous drainage improvements is a maximum of twenty years. Where improvements are designed to serve an area beyond that of direct benefit, the City may defer that portion of the assessment and fund it as a system cost. 4. New Street Construction The City's general policy and practice is to require new residential street construction during land use development applications to be constructed to City standards by the developer/applicant with no special assessments or public bonding support. 5. Street Reconstruction, Rehabilitation, and Mill and Overlays a. Reconstruction and Rehabilitation - The assessable cost of street reconstruction and street rehabilitation projects shall be determined by the benefit to properties affected by the project determined through a letter of benefit or similar from a licensed appraiser. The assessment shall be 90 percent of the median value of the benefit. For example, if the benefit for a direct access property was valued from $12,000-$15,000 per unit, the assessment would be $12,150 ($13,500 x .9 = $12,150). If the benefit for an indirect access property was $3,000-$5,000 per unit, the assessment would be $3,600 ($4,000 x .9 = $3,600). The method of assessment shall be based on per unit. The remaining cost shall be a City cost. 6. Councilmember Dejewski proposes amending the previous paragraph as follows: a. Reconstruction and Rehabilitation - The assessable cost of street reconstruction and street rehabilitation projects shall be determined by the benefit to properties affected by the project determined through a letter of benefit or similar from a licensed appraiser. The assessment shall be 90 percent of the low median value of the benefit. For example, if the benefit for a direct access residential property was valued from $12,000-$15,000 per unit, the assessment would be $10,800 $12,150 ($13,500 $12,000 x .9 = $10,800$12,150). If the benefit for an indirect access residential property was $3,000-$5,000 per unit, the assessment would be $2,700 $3,600 ($4,000 $3,000 x .9 = $2,700 $3,600). The method of assessment shall be based on per unit. The remaining cost shall be a City cost. 7. 1. For properties with access to the street receiving a reconstruction or rehabilitation, each existing unused development right and newly created development right resulting from the project will be assessed an amount equal to the assessment of a direct access property. 2. Landowners receiving assessments for existing unused development rights and newly created development rights may have the option of paying the entire assessment in one lump sum or through deferral until time of plat with no accrued interest during the period of deferral. Assessments will be filed with the County Recorder. Page 12 of 19 b. Mill and Overlays - The assessable cost of overlays and mill and overlays shall be determined by the benefit to properties affected by the project determined through a letter of benefit or similar from a licensed appraiser. The assessment shall be 90 percent of the median value of the benefit. For example, if the benefit was valued from $1,500-$2,500 per unit, the assessment would be $1,800. The method of assessment shall be based on per unit. The remaining cost shall be a City cost. 1. Exception: The City has completing initial overlays on roads without assessments, the following roads will receive one overlay without an assessment in order to complete the existing program, if the road is improved to a higher standard instead of an overlay the exception no longer applies: Bluestem Trail, Cates Longhorn Road, Chisolm Trail, Country Circle, Country Road, Hage Drive, Heather lane, High Bluff Lane, Hunters Ridge, Jackie Lane, Jubert Lane, Julie Ann Drive, Larkin Road, Maple Hill Road, Meadow Creek Drive, Mohawk Road, Oswald Farm Road, Pioneer Trail, Robert Lane, Rolling Hills Road, Rush Creek Drive, Schutte Farm Road, Sunnyhill Road, Sunset Lane, and Windmill Drive. c. Length of Assessment - The assessment period for street improvements is a maximum of twenty years. 8. SIDEWALK The front footage or unit cost method shall be the basis for assessment. The assessable cost for sidewalk improvements shall be 100% for both new construction and reconstruction up to 5 feet wide. Sidewalk maintenance and rehabilitation shall be repaired or replaced to the original standard and is the responsibility of the abutting property owner. 9. DRIVEWAY APPROACHES Driveway approaches shall be part of the overall project and not assessed separately. The improvement to driveway approaches should be considered as the amount of benefit is established. D. Deferred Assessments for Green Acres In cases where improvement projects are determined to benefit properties that have been certified to qualify for Green Acres exemption, the City will determine that portion of the project cost that benefits those properties, and finance that portion of the project cost as a system cost. Landowners of benefiting properties may have the option of paying the entire assessment in one lump sum or through deferral as allowed by Minnesota Green Acres statutes. Once the benefiting properties no longer qualify for Green Acres status, the City may recover the system cost. Interest will not be accrued during the period of deferral if assessed on a Green Acres parcel which is not designated as homestead property. Assessments to landowners of Green Acres parcels which contain both homestead and non-homestead assessment units will accrue interest during the period of the deferral on the homestead assessment units only. Assessments against Green Acres parcels will be filed with the County Recorder. Page 13 of 19 E. Deferred Assessments for Undeveloped Property In the Council’s discretion, the City may, at the meeting in which the Council approves an assessment, levy the assessment but defer the first installment of the assessment for unimproved property until a designated future year, or until the platting of the property or the construction of improvements. However, all deferred assessments must be paid within 30 years of the assessment levy. The City Council may set, by resolution, terms, conditions, standards, and criteria for the deferral and future payments. Assessments deferred pursuant to this section shall not accrue interest during the period of deferral. The City shall file a certificate with the county recorder stating the legal description of property subject to deferred assessments, and the amount of the deferred assessments. The City shall include all benefitted property in the assessment proceedings, including those properties on which it determines to defer assessments. F. Determination of Assessment Rate and Terms 1. Interest Rate on Assessments: The City will charge interest on special assessments at a rate specified in the resolution approving the assessment roll. If bonds were sold to finance the improvement project, the interest rate shall generally be one percent (1.0%) more than the average rate of the bonds, rounded to the nearest quarter of a percent. If no bonds were sold, the interest rate shall be set using the same formula based on the current bond market. 2. Length of Assessment: The assessment period for all improvements is subject to the requirements of the bond market at the time of project financing and thus may vary in length from the time periods proposed. G. Undeveloped Property The City shall require the developer, owner or sub-divider of any property within the City's corporate limits desiring to install street, curb and gutter, sidewalk, sanitary sewer or water main improvements to follow the City's subdivision ordinance, in addition to the following: 1. Upon written request by a developer, the City Council shall give consideration to the preparation of a feasibility report to determine the feasibility of construction for the desired improvements. The developer will prepare a plan and other such information, as the Council requires, prior to the Council making a decision on the request. 2. The developer and/or the property owner are required to sign a Developer's Agreement and Petition and Waiver Agreement, in a form acceptable to the City, prior to awarding a contract. 3. At the completion of an improvement, all improvement costs will be recorded or certified to the County per the Developer's Agreement H. Petitioned Improvement Projects The City will consider petitioned improvement projects. However, the need for specific projects shall be determined based on engineering standards (e.g. the existing condition represents a physical or structural hazard, or is no longer cost-effective to maintain, etc.) as determined by the City Public Works Superintendent and City Engineer and approved by the City Council. The City may consider the following information in approving or denying the petition: comprehensive cost of the project; cost to individual properties; demonstrated need for the project; existing site conditions of the proposed project; geographic scope of the Page 14 of 19 project area, and any other information the City deems relevant. The City Council has the authority to initiate non-petitioned improvement projects, if it is felt the improvements are in the best interest or safety of the citizens. Special Assessment Procedures Purpose: This procedure is for internal purposes to summarize statutory and administrative requirements with respect to special assessments. Changes occur statutorily on an annual basis and administratively through Council direction and administrative review on an on -going basis. Verification of any changes needs to occur prior to utilizing this document as those changes may supersede the contents of this document at the time of approval. Procedure: I. Initiation of Proceedings Either a petition from affected property owners or the Council initiates Minnesota State Statute chapter 429 proceedings. A. By Petition: If the Council chooses to proceed with an improvement based on a petition it must have the signatures of the owners of at least 50 percent in frontage of the property bordering the proposed improvements. B. By Council: The Council may act on its own initiative in proposing a local improvement and ordering a feasibility report. The Council must calculate the cost of the improvement or direct staff to do so. II. Feasibility Report Whether initiated by petition or by Council, Chapter 429 requires that the city engineer, or another person with similar skills, prepare a feasibility report. The feasibility report must cover such factors as whether the project is necessary, the availability of money in the general fund to pay the city's share of the cost, an estimate of that cost, whether the improvement is cost effective, and any other information necessary for Council consideration. The feasibility report must also include the estimated cost of the improvement as recommended. Since a reasonable estimate of the total amount to be assessed and a description of the methodology used to calculate Page 15 of 19 individual assessments for affected parcels must be available at the hearing it could be part of the commissioned report. The feasibility report is integral to the assessment process. Best practice suggests that the City Council pass a resolution receiving the report and provide preliminary notice of the improvement. Ill. Initial Considerations The law requires two public hearings commonly known as an improvement hearing and an assessment hearing; in between these two public hearings Council may order the improvement, decide how to construct the project and tabulate an assessment roll. A. Determining Benefit Districts: Determining what area benefits from improvement projects, or the area against which the City will levy assessments, is a major policy decision for the City Council. The benefit district varies with the kind of improvement. For some improvements, such as a water tank, the area benefited might be very large. In levying an assessment to finance the tank's construction the Council might assess the entire area the tank services. The special benefit test still applies. City staff, consulting engineers and attorneys may provide the basis for Council to determine what area or district to assess for a specific improvement because that area benefits from the improvement. B. City's Share: At any time before or after the City actually incurs expenses for the improvement, the Council must pass a resolution determining how much the City plans to pay and separate that from amounts to be assessed. Best practices suggest the Council work with an appraiser and an attorney to determine the appropriate City share of a particular project. The City has adopted a policy to address the methodology of the assessment calculations. C. Non-abutting Property: The Council may wish to levy assessments against adjacent, non - abutting properties if the properties benefit from the improvement. D. Service Laterals: City utility ordinance requires that property owners maintain private water and sewer service laterals. When an improvement project requires new service laterals the City may require that property owner to install or replace them. E. May Omit Improvement Hearing: The Council may omit the improvement hearing if 100 percent of the affected landowners sign the petition requesting the improvement. If the landowners are not paying 100% of the project costs the City will consider holding both public hearings. F. Two or More Simultaneous Local Improvements: When the City proposes undertaking two or more local improvements simultaneously the City does not need to issue separate notices and hold separate improvement hearings on different dates. The notice will describe each improvement separately, stating the estimated cost for each one and noting that there will be a hearing to address each improvement. IV. Prepare for the Improvement Hearing The purpose of the first hearing is for the Council to discuss a specific local improvement before ordering it done. The Council considers all the information in the feasibility report Page 16 of 19 and any other information necessary for Council deliberation. A. Publish Notice of the Improvement Hearing: The City must publish notice of the initial public hearing on the proposed project twice in the official newspaper, stating the time and place of the hearing, the general nature of the improvement, the estimated cost, and the area proposed to be assessed. The notices must appear at least one week apart. At least three days must elapse between the last publication date and the date of the hearing. B. Mail Notice of the Improvement Hearing: The City must mail a notice once to each property owner in the proposed assessment area, at least 10 days prior to the improvement hearing that states the time and place of the hearing, the general nature of the improvement, the estimated cost and the proposed assessment area. The notice must also contain a statement that a reasonable estimate of the cost of the assessment will be available at the hearing. The City will diligently make every effort to notify citizens about assessment proceedings. According to statute, failure to give mailed notice of the improvement hearing will not invalidate subsequent assessment proceedings. Notice to other governmental entities must be sent out at least two weeks before the improvement hearing, by registered or certified mail to the head of the instrumentality, department or agency having jurisdiction over the property. V. Improvement Hearing At the improvement hearing, interested persons may voice their concerns, whether or not they are in the proposed assessment area. A reasonable estimate of the total amount to be assessed and a description of the methodology used to calculate individual assessments for affected parcels must be available at the hearing. If the Council rejects the project, it may not reconsider that same project unless another hearing is held following the required notice. The Council must prepare a record of the proceedings and make written findings. The Council may adjourn and subsequently continue the improvement hearing. To provide proper notice, before the improvement hearing is adjourned, the Council must state on record, the date, time and place of the continuation of the improvement hearing, if any. VI. Ordering the Improvement A resolution ordering the improvement may be adopted at any time within six months after the date of the improvement hearing. A. Vote Requirements for Ordering the Improvement: If the improvement is made pursuant to a legally sufficient petition from property owners, the Council adopts the resolution by a simple majority vote of all members of the Council. If there is not a petition, adoption requires a 'super-majority' vote, meaning the council can only adopt the resolution by a four-fifths vote of all members of the Council. B. Time Limits for Local Improvements: The resolution ordering the improvement may be adopted at any time within six months after the date of the improvement hearing. Either arrangements for day labor or a contract must be made within one year of adopting the resolution ordering the improvement, unless the Council specifically states a different timeframe in the resolution ordering the improvement. VII. Competitive Bidding Page 17 of 19 The law permits the Council to carry out, in advance of the assessment hearing , all the steps prior to, but short of, actually issuing of a contract for the improvement. Thus, if the Council wishes to provide firm estimates of costs at the hearing, it may, in addition to the required preliminary report, prepare completed plans and specifications, advertise for bids, and open and tabulate them before the assessment hearing. Once the Council orders a public improvement, staff or consultants prepare the necessary plans and specifications and the Council either: • Contracts for all or part of the work to be performed by outside parties, or • Orders all or part of the work to be done by city staff and contracts for any necessary materials and equipment. In either case, contracting law applies. The City Attorney should coordinate the contracting process in combination with the special assessment process. VIII. Prepare the Proposed Assessment Rolls The City Clerk, with the assistance of the engineer or other staff prepares the proposed assessment rolls. The proposed assessment cannot exceed the increase in market value accruing to the property as a result of the public improvement project. Road Assessment Calculations Components: A. Future Lots within the Combined Method Calculation: The maximum potential parcels are calculated with the current zoning. B. Cemeteries: A cemetery cannot be assessed in accordance with State Statute. C. Right of Way: Parcels that are entirely right of ways will not be assessed. D. Rounding: Calculation of assessment will need to be adjusted due to rounding. Practice is that $.01 per parcel will be adjusted either positively or negatively beginning with the last parcel listed. IX. Prepare for the Assessment Hearing The purpose of the second hearing is to give property owners an opportunity to express concerns about the actual special assessment. The Council will pass a resolution setting the date and time of the assessment hearing and direct the City Clerk to publish and mail notice about the assessment hearing. A. Publish Notice of the Assessment Hearing: At least once and at least two weeks before the assessment hearing, the City must publish notice of the hearing in the city newspaper. The published notice must include the hearing time, date, place, overall project description, area to be assessed, total cost of the improvement, a description of a landowner's right to appeal the assessment, and any deferment options, if available. B. Mail Notice of the Assessment Hearing: At least two weeks before the hearing the City must mail notice of the hearing to each affected property owner. This mailed notice must Page 18 of 19 include the amount of the special assessment against the individual parcels, a description of the landowner's right to appeal the assessment, possible prepayment provisions, and the interest rate on the assessments. Failure to comply with the requirements for published and mailed notice invalidates the assessments. The Clerk will execute an affidavit attesting to the mailing to property owners. X. Assessment Hearing The assessment hearing may be adjourned and continued to another time. If the assessment hearing is adjourned, proper notice shall be given, stating for the record, the date, time and place of the continuation of the hearing. A. Resolution Adopting Assessment Roll: At the assessment hearing the Council shall hear and consider all objections to the proposed assessment, whether presented orally or in writing. The Council may change or amend the proposed assessment as to any parcel. Council must by resolution adopt the special assessment against the lands named in the assessment roll. Once the assessment roll is adopted the assessments are set and become liens against the properties listed. The Council must prepare a record of the proceedings and written findings as to the amount of the assessment roll at this hearing. B. Council Decides Interest of Special Assessments: Special assessments may bear interest at any rate the Council determines. In setting the rate the Council should make sure there is a reasonable relationship between the assessment interest rate and the bond interest rate if the City is issuing bonds to finance the project. If the city finances the project with funds on hand without using bonds, the Council will want to look at the interest rate the City would otherwise have earned on the funds. C. Council Decides Payment Timelines: The Council must also decide the number of years over which the property owners may pay the assessment. The statutes permit payment over a period of not more than 30 years. XI. Sending of Final Notice The law does not require that the City send final notice of assessment to property owners if the amount assessed is the same as that listed in the previously mailed assessment hearing notice. The City chooses to notify property owners of all final assessment amounts whether they differ from the proposed assessment or not. Staff will also notify owners by mail the interest rates and prepayment requirements as stated in the proposed assessment notice. XII. Certification of Special Assessment Rolls The City Clerk must certify the assessment rolls to the County Auditor by November 30. The Assessment Rolls need to be accompanied by Council Resolution, certificate with the city seal signed by the City Clerk and a rate card. The County Auditor spreads the assessment every year for collection with taxes. XIII. Payment of Assessments and Interest Property owners initially have two options regarding their assessment. They can either pay the total amount of their assessment immediately, or pay the assessments in annual installments with interest under the terms set by the Council. Page 19 of 19 The property owner can: • Pay the entire amount of the assessment within 30 days after the Council adopts the assessment rolls with no interest. • Pay the entire amount any time after 30 days, but before any certification has been made to the County Auditor with interest accrued to the date of payment. • Any time after the certification the property owner may still pay the entire remaining unpaid amount to the City. The property owner must pay the entire remaining unpaid amount of the assessment before November 15 of any year and must also pay all interest accrued until the end of that calendar year. If the property owner elects not to pay the entire amount of the assessment at once, they may pay it in annual installments spread over the number of years the Council has allowed including interest calculated at the rate established by the Council. XIV. Deferred Assessments Deferred assessments are certified to the County Auditor but collection is deferred. All deferred assessments constitute liens on the property and must be paid within 30 years of the assessment levy. Property owners may request deferment provided the property owner or the property meets certain criteria. The City three types of authorizesd deferrals forare 1) undeveloped property, 2) senior citizen and disability deferral, and 3) Ggreen Aacres deferrals. Interest on the assessments discussed subsequently, may be paid or deferredIf the assessment deferral is for undeveloped property, or for a Green Acres assessment unit which is not designated as homestead property, no interest shall accrue during the period of the deferral. . If interest is deferred with the assessment it will be computed on a compounding basis . Any interest on deferred assessments may be paid or deferred during the period of the deferral. A. Notice of Deferred Assessments: The City will record deferred special assessments with the County Auditor. The certificate of the deferred assessment will contain the type of deferral. B. Interest on Deferred Assessments: Property owners may pay interest (if applicable) either annually during the period of deferment, or when the assessment becomes payable. If interest is deferred with the assessment it will be computed on a compounded basis. { STAFF REPORT Agenda Item 11a. Council Meeting: April 13, 2017 Prepared By: Brad Martens Topic: Corcoran Southeast District Market Analysis Action Required: Accept Report Summary: In 2016 the City Council authorized staff to proceed with a market analysis of the southeast district of Corcoran. Staff reviewed three proposals and selected Maxfield Research and Consulting to complete the analysis. Attached to this report is the market analysis (printed packets for City Council contain only the executive summary, electronic versions contain the full analysis). Mary Bujold of Maxfield Research and Consulting will be presenting a summary of the report at the meeting. Financial/Budget: The approved analysis included a budget of $19,635 of which the City of Corcoran is responsible for 50%. The other 50% will be paid by Hennepin County. Funds are available through the long range planning fund which was created from 2015 surplus funds. Alignment with Values: This item relates to the following adopted values: EXCELLENCE AND QUALITY IN THE DELIVERY OF SERVICES We believe that service to the public is our reason for being and strive to deliver quality services in a highly professional, cost-effective, and friendly manner. FISCAL RESPONSIBILITY We believe that fiscal responsibility and the prudent stewardship of public funds is essential for citizen confidence in government. OPEN AND HONEST COMMUNICATION We believe that open and honest communication is essential for an informed and involved citizenry and to foster a positive working environment for employees. Options: 1.Accept the Market Potential Analysis Report. Recommendation: Accept the Market Potential Analysis Report. Council Action: Accept the Market Potential Analysis Report. Attachments: 1. A Market Potential Analysis for the Corcoran Commercial Core 7575 Golden Valley Road Suite 385 Golden Valley, MN 55427 612.338.0012 www.maxfieldresearch.com A Market Potential Analysis for the Corcoran Commercial Core, Minnesota (main) 612‐338‐0012 (fax) 612‐904‐7979 7575 Golden Valley Road, Suite 385, Golden Valley, MN 55427 www.maxfieldresearch.com March 29, 2017 Mr. Brad Martens Mr. Andrew Gillett City Administrator Project Manager City of Corcoran Hennepin County Community Works 8200 County Road 116 701 S. 4th Avenue Corcoran, MN 55068 Minneapolis, MN 55402 Dear Mr. Martens and Mr. Gillett: Attached is the market study titled, “A Market Potential Analysis for the Corcoran Commercial Core in Corcoran, Minnesota.” This study provides market data, conclusions and recommenda‐ tions for the City of Corcoran to consider how its core commercial district will develop in the fu‐ ture as the community grows. The analysis is intended to complement the City’s Comprehen‐ sive Plan process and prepare the community for future growth. The scope of this study includes analyses of the following factors: current characteristics of Corcoran and its location in the West/Northwest Metro Area, growth and development pat‐ terns of the community and adjacent communities, competitive commercial districts, demo‐ graphic and economic characteristics of the Market Area; housing market conditions; commer‐ cial market conditions, strategic assessment for future development, comments regarding land use and current zoning and considerations in developing the City’s core community district. The study concludes with recommendations for a strategic implementation plan for develop‐ ment in Corcoran. These recommendations address marketing and promotions and develop‐ ment timeframes. Please contact us if you have questions or require additional information. Sincerely, MAXFIELD RESEARCH AND CONSULTING, LLC Mary C. Bujold President Attachment TABLE OF CONTENTS Page EXECUTIVE SUMMARY .......................................................................................................... 1 PURPOSE AND SCOPE ............................................................................................................ 7 Study Purpose ................................................................................................................... 7 Scope of Services ............................................................................................................... 7 COMMUNITY OVERVIEW ...................................................................................................... 8 Introduction ...................................................................................................................... 8 Regional Location .............................................................................................................. 8 Study Area Location and Characteristics .......................................................................... 13 Access and Visibility .......................................................................................................... 20 Proximity to Shopping, Employment, and Services .......................................................... 22 Appropriateness of the Area for Commercial and Mixed‐Use Development .................. 24 HOUSING MARKET ANALYSIS ............................................................................................... 26 Introduction ...................................................................................................................... 26 Housing Market Area Definition ....................................................................................... 26 Population and Household Growth Trends ...................................................................... 28 Age Distribution ................................................................................................................ 29 Household Income ............................................................................................................ 32 Household Tenure ............................................................................................................. 35 Household Type ................................................................................................................ 39 Employment Trends .......................................................................................................... 41 Commuting Patterns ......................................................................................................... 49 Summary of Demographic Trends .................................................................................... 51 Residential Construction Trends ....................................................................................... 52 Overview of Rental Market Conditions ............................................................................. 54 Selected Market Rate Apartment Developments ............................................................. 58 Pending Rental Developments .......................................................................................... 64 Market Rate General Occupancy Rental Demand Calculations ........................................ 65 Home Sales ........................................................................................................................ 68 Active Listings .................................................................................................................... 72 Selected For‐Sale Multifamily Housing Developments ..................................................... 74 For‐Sale Housing Market Demand Analysis ...................................................................... 78 SENIOR HOUSING MARKET ANALYSIS ........................................................................... 80 Introduction ...................................................................................................................... 80 Senior Housing Defined ..................................................................................................... 80 Older Adult (Age 55+) Population and Household Trends ............................................... 82 Supply of Senior Housing in the HMA ............................................................................... 85 Pending Senior Housing Developments in the HMA ........................................................ 88 Senior Housing Demand Calculations ............................................................................... 89 Senior Housing Demand Summary ................................................................................... 98 TABLE OF CONTENTS (continued) Page COMMERCIAL MARKET ANALYSIS ................................................................................ 99 Introduction ...................................................................................................................... 99 Market Area Definition ..................................................................................................... 99 Population and Household Growth Trends ...................................................................... 101 Daytime Population .......................................................................................................... 102 Consumer Expenditure Patterns ....................................................................................... 103 Types of Retail Goods and Customer Shopping Patterns ................................................. 107 Twin Cities Retail Market Conditions ................................................................................ 109 Selected Retail Properties in the Commercial Market Area ............................................. 113 Retail Demand Potential and Leakage .............................................................................. 116 Retail Development Potential ........................................................................................... 120 Office‐Using Business Growth by Type of Business .......................................................... 123 Growth of Jobs Using Office Space ................................................................................... 127 Twin Cities Office Market Conditions ............................................................................... 129 Twin Cities Medical Office Market Conditions .................................................................. 132 Selected Office Properties in the Commercial Market Area ............................................. 134 Office Development Potential........................................................................................... 137 Business and Property Owner Interviews ......................................................................... 139 CONCLUSIONS AND RECOMMENDATIONS .......................................................................... 142 Introduction ....................................................................................................................... 142 Summary of Findings ......................................................................................................... 142 Demand Summary ............................................................................................................. 144 Strategic Plan and Implementation Guide ........................................................................ 148 LIST OF TABLES Table Number and Title Page Community Overview 1 Corcoran Commercial Core, Land Use Summary .......................................................... 15 2 City of Corcoran, Business Mix by Industry Sector ....................................................... 17 Housing Market Analysis 3 Population and Household Growth Trends and Projections, Corcoran Housing Market Area .................................................................................................................. 28 4 Age Distribution, Corcoran Housing Market Area ........................................................ 31 5 Household Income by Age of Householder, Housing Market Area .............................. 33 6 Tenure by Age of Householder, Corcoran Housing Market Area ................................. 37 7 Household Type, Corcoran Housing Market Area ........................................................ 39 8 Employment Growth Trends and Projections, Corcoran Housing Market Area .......... 42 9 Labor Force and Resident Employment Trends, Corcoran Housing Market Area........ 43 10 Quarterly Census of Employment and Wages, Corcoran Housing Market Area .......... 48 11 Commuting Patterns, City of Corcoran ......................................................................... 49 12 Commuting Inflow/Outflow Characteristics, City of Corcoran ..................................... 50 13 Residential Building Permit Trends, Housing Market Area .......................................... 52 14 Average Rents/Vacancies Trends, Corcoran Market Area ........................................... 57 15 Select New Market Rate Rental Projects, Corcoran Housing Market Area .................. 58 16 Unit Type Summary, Selected Market Rate Rental Developments .............................. 60 17 Unit Features and Common Area Amenities, Selected Market Rate Rental ............... 62 18 Pending General Occupancy Rental Developments, Housing Market Area ................. 64 19 Projected Demand for Market Rate Rental Housing, Housing Market Area ................ 67 20 Residential Resales Activity, Housing Market Area ...................................................... 69 21 Residential Resales Activity – Price Distribution, Housing Market Area ...................... 71 22 Homes Listed for Sale, Housing Market Area ............................................................... 72 23 New Construction Multifamily Homes, Housing Market Area ..................................... 75 24 General Occupancy For‐Sale Multifamily Housing Demand, Housing Market Area .... 79 Senior Housing Analysis 25 Market Rate Active Adult/Few Services Senior Housing Properties ............................ 86 26 Market Rate Active Service Enhanced Senior Housing Properties ............................... 87 27 Pending Senior Housing Developments, Housing Market Area ................................... 88 28 Market Rate Active Adult/Few Services Housing Demand, Housing Market Area ...... 90 29 Congregate Living Demand, Housing Market Area....................................................... 92 30 Market Rate Assisted Living Demand, Housing Market Area ....................................... 95 31 Memory Care Demand, Housing Market Area ............................................................. 97 32 Senior Housing Demand Summary, Housing Market Area ........................................... 98 LIST OF TABLES CONTINUED Table Number and Title Page Commercial Market Analysis 33 Population and Household Growth Trends and Projections, Corcoran Commercial Market Area .................................................................................................................. 101 34 Daytime Population, Corcoran Commercial Market Area ............................................ 102 35 Estimated Household Expenditures by Selected Product Type, Corcoran Commercial Market Area .............................................................................................. 105 36 Retail Market Statistics, Twin Cities .............................................................................. 110 37 Quoted Average Net Retail Rental Rates, Twin Cities Metro Area ............................... 112 38 Retail Buildings Available for Lease, Corcoran Commercial Market Area .................... 114 39 Retail Demand Potential and Leakage, Corcoran Commercial PMA ............................ 117 40 Retail Demand Potential and Leakage, City of Corcoran .............................................. 119 41 Demand for Neighborhood Retail Space, Corcoran Commercial Market Area ............ 122 42 Demand for Neighborhood Retail Space, City of Corcoran .......................................... 122 43 Office‐Using Businesses by Industry and Size of Business, Corcoran Commercial Market Area .................................................................................................................. 123 44 Employment Growth Trends and Projections – Office Sectors, Corcoran Commercial Market Area .................................................................................................................. 127 45 Office Market Statistics, Twin Cities ............................................................................. 130 46 Medical Office Market Statistics, Twin Cities ............................................................... 133 47 Office Buildings Available for Lease, Corcoran Commercial Market Area ................... 137 48 Projected Demand for Office Space, Corcoran Commercial Market Area ................... 139 Conclusions and Recommendations 49 Demand Summary, Corcoran ........................................................................................ 144 50 Potential Commercial Tenants, Corcoran ..................................................................... 149 EXECUTIVE SUMMARY MAXFIELD RESEARCH AND CONSULTING, LLC 1 Purpose and Scope Maxfield Research and Consulting, LLC was engaged jointly by the City of Corcoran and Henne‐ pin County Community Works (the “Clients”) to complete a Market Analysis regarding the po‐ tential to establish a downtown community district in Corcoran that will position the City to de‐ velop a core community identity as it enters its next phase of growth and beyond. The scope of the study includes analyses of the following factors: characteristics of Corcoran’s existing commercial base and community gathering spaces, demographic and economic characteristics of the Market Area; housing market conditions; commercial market conditions (office and re‐ tail) and the development potential for housing and commercial uses (office and retail) in the Market Area. Community Overview Corcoran is a third‐tier city in the western/northwestern Twin Cities Metro Area and is generally bounded by the following roadways: County Road 19 on the west, Hackamore Road on the south, Highway 101 on the east and County Road 117 on the north. Corcoran is low density in character (primarily large homesteads of one acre or more in size), but is developing areas with more traditional suburban densities and development is pushing out from adjacent communi‐ ties to Corcoran. The City has just under 36 square miles and is similar in size to its adjacent neighbors, Maple Grove to the east and Plymouth to the southeast. Plymouth is nearing full development. As such, there is ongoing pressure to move further west into Corcoran and other adjacent communities, such as Medina, for residential development. The following points summarize current characteristics of Corcoran and its position to consider increasing its resi‐ dential density. Strengths Small commercial core in a compact area, but several of the buildings are older and de‐ teriorated; under‐utilized parcels could be redeveloped; Expanding population and household base in and around Corcoran will, over time, gen‐ erate a growing need for commercial goods and services; County Roads 10 and 116 provide good access and visibility to businesses located in the central commercial core of Corcoran and traffic volumes are expected to grow steadily over the next 20 years; a realignment of County Road 10 south to Larkin Road and then along County Road 116 north to County Road 30 will increase traffic along County Road 116, but may reduce traffic west of County Road 116 once the realignment is complete; There are facilities that currently anchor the commercial district and pull people into the area, including the industrial business park, City offices, parks and ballfields, and con‐ venience store; EXECUTIVE SUMMARY MAXFIELD RESEARCH AND CONSULTING, LLC 2 Challenges The limited amount of residential development that exists in Corcoran constrains the amount of retail and office space that can be attracted to the community in the short‐ term (over the next three years); There is plenty of land available and there may be a tendency, depending on how land is purchased and developed, to isolate rather than group uses close together. A strong plan for development of vacant land and redevelopment of existing properties will be necessary. Co. Roads 10, 116 and 50 offer good access and visibility to the community’s commercial district. Planned highway improvements will reduce the amount of traffic that is fun‐ neled along the current County Road 10 to the northwest creating some additional de‐ velopment parcels for the core commercial area, and, Stronger retail nodes are located in Maple Grove and Plymouth that are more attractive locations for many commercial businesses, particularly national chain retailers until Cor‐ coran develops a larger residential base. Demographic Review Key demographic factors influencing the area, notably population and household growth, an ag‐ ing population among current households, but a strong potential to attract a younger house‐ hold base in the near future with the development of housing products that would be targeted to meet their needs. Poised for significant growth due to land area, Corcoran is projected to experience employment growth, household income growth and shifts in household tenure and household type as the dynamics of the household base change. As the City experiences new residential development, there will be an increased demand for a variety of housing products and a range of commercial goods and services (primarily convenience‐ and neighborhood‐ oriented) in the community and in the Commercial Market Area. Employment is projected to increase at a faster pace in the 2020s, but residential development is most likely to occur more rapidly than commercial or industrial development. Although job growth is a primary driver of demand for commercial real estate, Corcoran’s more distant loca‐ tion from major Metropolitan freeways, indicates it is more likely to attract small businesses and mid‐size industrial users. The expanding population and household base in and near the current commercial core will create a growing need for commercial goods and services, stimulating demand for new com‐ mercial space in the area. In addition, an expanding base of business establishments in the area will support the potential for additional residential development. Commercial development however, will follow new residential development. EXECUTIVE SUMMARY MAXFIELD RESEARCH AND CONSULTING, LLC 3 Residential Market Conditions The equilibrium vacancy rate for market rate rental housing is considered to be 5.0%. This al‐ lows for normal turnover and an adequate supply of alternatives for prospective renters. Dur‐ ing the fourth quarter of 2016 (the most recent data available), the vacancy rate was 2.7% in the Twin Cities Metro Area and 8.1% and 3.2%, respectively in the Maple Grove and Plymouth submarkets of the Housing Market Area (HMA). The 8.1% vacancy rate in Maple Grove reflects the recent opening of a second phase of Skye at Arbor Lakes, which is still in its initial lease‐up period. Pending consistent absorption of rental units in the Maple Grove submarket, we antici‐ pate that vacancy rates will decrease to below 5% by spring 2017. The overall supply of market rate rental housing in the Market Area as a whole is below the level considered adequate to meet demand. The current supply rental units coupled with rising rental rates is stimulating development ac‐ tivity, but new construction has been primarily focused in Maple Grove and Rogers. We identi‐ fied two market rate rental properties under construction, Village at Arbor Lakes and Vincent Woods. There are some additional developments that have been proposed but are not yet ap‐ proved. Median home resale prices having been climbing steadily in the Housing Market Area since dropping to lows of $210,000 for single‐family homes and $139,500 for multifamily units in 2011. Since 2011, the median resale price for single‐family homes has increased 60% to $336,000 as of year‐end 2016, while multifamily pricing jumped 35% to $188,950. Equilibrium in the for‐sale residential market is generally considered to be a six‐month supply of homes on the market. Based on the current inventory of homes listed for sale as of March 2017, there is less than a three‐month supply of residential units on the market in the Housing Market Area. While early spring is typically a very low time for inventory, there has been a consistent low supply of resale homes available on the market for the past two to three years. The greatest population and household growth is projected to occur among older adults in the Market Area. Aging of baby boomers led to an 88% increase in the 55 to 64 population be‐ tween 2000 and 2010 in the Market Area. As this group ages, all cohorts age 55 or greater are expected to see increases over the next several years, particularly the 70 to 74 age group which is projected to grow 43% between 2016 and 2021. We identified 2,400 senior housing units in the Housing Market Area with the majority located in Maple Grove and Plymouth. The total supply of senior housing units in the Housing Market Area is not expected to increase substan‐ tially over the next 24 months, but the growing older adult and senior population should main‐ tain long‐term demand for senior housing alternatives in the overall Housing Market Area. EXECUTIVE SUMMARY MAXFIELD RESEARCH AND CONSULTING, LLC 4 Commercial Real Estate Market Conditions Our review of current commercial real estate market conditions indicates that the retail and of‐ fice commercial real estate markets are at various stages of the real estate cycle, which consists of four phases: Expansion (rising rents, increasing demand and active development); Oversup‐ ply (demand softens, rents flatten, but construction activity remains high); Saturation (weak demand, declining rents, and development slows); and, Recovery (increasing demand, rents stabilize with limited new construction). Retail Market As of the fourth quarter of 2016, the Twin Cities retail market had a vacancy rate of 5.7%, which is an increase over 2015 when the vacancy rate was 4.4%. Demand for retail space generated 251,879 square feet of absorption through 2016, but was low due to several 4th Quarter store closings. Retail demand was highest in neighborhood centers, which experienced 203,389 square feet of absorption in 2016. The Twin Cities retail market recovered from high vacancy rates and weak demand during the Recession and has moved into the expansion phase. Vacancy rates have been declining since 2010, while demand has increased. Market conditions have become very competitive and re‐ tailers are faced with a shortage of available quality space and rising lease rates. Development activity is picking up in response to increased demand and tightening supply, and as retailers compete for a declining supply of available space, lease rates are being pushed higher. Retail‐ ers however, are primarily focused on high demand locations where there is a strong concen‐ tration of retail uses and proven demand. In the Corcoran Commercial Market Area, most of the retail categories experienced leakage of retail sales during 2016 indicating that Market Area residents are purchasing retail goods and services at establishments located outside the area. This data suggests that Corcoran could at‐ tract stores in a variety of retail categories. However, the most likely uses to be drawn to the area would be neighborhood and convenience‐oriented goods and services where there is sig‐ nificant leakage such as full‐service and limited‐service restaurants, health and personal care stores). These uses would be attracted to the community as more rooftops are constructed. Office Market The Twin Cities office market posted negative absorption of 421,378 square feet of negative ab‐ sorption in 2016, following 1,025,689 square feet of positive absorption in 2015. As a result, the vacancy rate rose to 14.4%, up from 13.6% in 2016. Vacancy in the Northwest submarket, which includes Corcoran, remained stable despite absorption of nearly 102,000 square feet in 2016. EXECUTIVE SUMMARY MAXFIELD RESEARCH AND CONSULTING, LLC 5 Equilibrium in the office market is generally considered to be vacancy of approximately 10% to 12%. Office vacancy rates remain modestly above equilibrium and there is little demand for new speculative office development, particularly in most suburban submarkets. The slow re‐ covery has been driven, in part, by a shift in office space utilization as companies strive to be‐ come more efficient by increasing densities in office space. Additionally, the tight labor market is a major consideration for companies considering expansion or relocation. Based on the composition of business establishments in the surrounding area, we anticipate that there will be growing demand from office‐using businesses that offer services to local households, such as; health care providers, insurance agencies, accountants, and real estate agents. While vacancy rates in the multi‐tenant office market are above equilibrium, there is no office space currently listed as available for lease in the Commercial Market Area. Contin‐ ued household growth in the Market Area will stimulate demand for services from businesses in these sectors. Demand Summary In total, we find demand to support 1,443 units of single‐family housing between 2016 and 2030 and 247 units of owned multifamily housing during this same timeframe in Corcoran. Market rate multifamily rental demand was calculated at 113 units and demand for senior housing would total 212 units including a mix of adult/few services housing and service‐ enriched units between 2016 and 2021. Owner‐occupied multifamily housing development in Corcoran should target the first‐time home buyer market, particularly from couples that do not have children. In addition, products targeted to older adult households (never‐nesters or empty‐nesters) and retired individuals and couples are also likely to be popular, including twinhomes and detached villas. The strongest sources of demand for new rental housing in the HMA will likely be singles and couples without children in their late‐20s to mid‐40s who work in nearby suburban communi‐ ties or in either Downtown Minneapolis. Mid‐age households (never‐nesters or empty‐nesters) who want to sell their single‐family homes and have more freedom for leisure pursuits could al‐ so account for a portion of demand for new rental housing in the area. There is currently excess demand for 748 active adult/few services senior housing units and 758 service‐enhanced senior housing units in the HMA. Utilizing capture rates of 10% to 15%, we estimate that Corcoran would be able to support 113 active adult units and 99 service‐ enhanced units by 2021. In total, we find demand to support roughly 62,000 square feet of commercial space in Corco‐ ran by 2030 that could be centered in the commercial core, including 41,000 square feet of neighborhood retail space and nearly 21,000 square feet of office space. EXECUTIVE SUMMARY MAXFIELD RESEARCH AND CONSULTING, LLC 6 The following figure summarizes our demand findings for market rate general occupancy resi‐ dential, senior housing, retail, and office space. Capture Rate Multifamily Residential (2016 to 2030) Market Rate Rental2,266units5%113units For‐Sale Residential19,375units5%1,690units Single‐Family 14,428units10%1,443units Owned Multifamily 4,947units5%247units Market Rate Senior Housing1,506units212units Active Adult/Few Services748units113units Ownership351units15%53units Rental397units15%60units Congregate311units15%47units Assisted Living146units15%22units Memory Care301units10%30units Commercial (2016 to 2030) Neighborhood Retail101,930Sq. Ft.40%40,772Sq. Ft. Office419,691Sq. Ft.5%20,985Sq. Ft. Note: Demand for Market Rate Senior Housing and GO Rental to 2021 only Source: Maxfield Research & Consulting, LLC DEMAND SUMMARY CITY OF CORCORAN AND CORCORAN COMMERCIAL AREA Excess Market Area Demand Demand Capturable in Corcoran PURPOSE AND SCOPE MAXFIELD RESEARCH AND CONSULTING, LLC 7 Study Purpose Maxfield Research and Consulting, LLC was engaged by the City of Corcoran and Hennepin County Public Works (the “Clients”) to complete a market potential analysis for Corcoran and to identify the community’s need and ability to establish a core district that would serve as the center of the community’s commercial and government district and would provide a more co‐ hesive identity to the City as the community grows and develops. Uses evaluated include resi‐ dential housing and commercial uses. This analysis is intended to provide the City with market information and strategies to consider the development of a more formal downtown commer‐ cial district for the future to prepare for the next stage of growth and development. Scope of Services The scope of this study includes analyses of the following factors: community overview; demo‐ graphic and economic characteristics of the Market Area; housing market conditions in the area and the development potential for commercial uses (office and retail) in Corcoran. The methodology used to evaluate demand in this study is proprietary to Maxfield Research and Consulting, LLC but is consistent with methodologies used by analysts throughout the real estate industry. This report includes primary and secondary research. Primary research in‐ cludes interviews with local officials, business owners, and real estate professionals. Secondary research is credited to the source when used, and is usually data from the U.S. Census, the Met‐ ropolitan Council and the Minnesota Department of Employment and Economic Development. Secondary research is always used as a basis for analysis, and is carefully reviewed in light of other factors that may impact projections. All of the information on active real estate listings was collected via the Greater Minneapolis Area Association of Realtors and Xceligent Inc. In‐ formation on all pending developments residential and commercial developments was collect‐ ed by Maxfield Research and Consulting, LLC and is accurate to the best of our knowledge. COMMUNITY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 8 Introduction This section of the report presents an analysis of the location and characteristics of Corcoran and a discussion of the community’s regional location and general characteristics of the area that is currently considered as the community’s core commercial district. Information regarding the physical characteristics of its current core commercial area, accessi‐ bility to and visibility of the area, and a summary of the existing land uses and business mix in close proximity to the City’s key intersection (currently Co. Roads 10 and 116) are also present‐ ed. Finally, this section discusses key factors and challenges in strengths and weaknesses of the current community core and its potential for create a Downtown district as the City increases its residential and commercial bases. Regional Location The area that is being considered for potential development as a “Downtown District” in Corco‐ ran can generally be described as property located east of Co. Rd. 116 with a northern bounda‐ ry of City Hall and a southern boundary of Larkin Road. The “Downtown District” is shown on the map on the following page. The east boundary extends to Maple Hill Road and the west boundary extends to Co. Rd. 116. This is the approved Downtown District concept plan. Land uses in and adjacent to the existing Corcoran commercial area are predominantly com‐ mercial retail and industrial uses situated south of the existing Co. Rd. 10 and along and west of Co. Rd. 116. Areas north of Co. Rd. 10 are largely undeveloped or developed with large‐lot sin‐ gle‐family homes and very limited commercial business. With the limited amount of develop‐ ment currently in place, the City has a substantial amount of flexibility in how it may plan to create a central commercial/residential core that would have a higher density than most of the rest of the City. Traditional suburban development is occurring to the southeast along County Road 101 where a new Lennar subdivision (Ravinia) is under construction. A site at the inter‐ section of Co. Rd. 10 and Co. Rd. 101 is planned to develop with retail uses including a new Hy‐ Vee grocery store. These uses are a short distance from the commercial area of Corcoran and it is anticipated that as growth pushes further to the west, commercial interest at and near the in‐ tersection of County Roads 10 and 116 will increase. Corcoran is a community of 5,475 people and 1,884 households (2015 estimates) located in the Twin Cities Metropolitan Area, which encompasses 13 counties and included an estimated 3.5 million people in 2015. Corcoran is located in the northwest portion of the Metro Area in Hennepin County. Hennepin County had an estimated population of 1,221,703 people in 2015. This information was provided by the Metropolitan Council and the US Census Bureau. The map on the following page shows the location of Corcoran in the seven‐county core of the Metro Area (estimated population of 3.0 million), which consists of the Counties of Anoka, COMMUNITY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 9 Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. The City of Maple Grove (2015 population of 65,155) borders Corcoran on the east and Plymouth (2015 population of 74,592) borders Corcoran on the southeast, while Greenfield (2015 population of 2,782) is situated west of Corcoran. Rogers (2015 population of 12,381) borders Corcoran on the north and Me‐ dina borders the City on the south (2015 population of 5,967). The maps and photos on the following pages display images of Corcoran’s existing commercial district and the areas that surround it as well as its location in the Metro Area. Regional Location COMMUNITY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 10 Proposed Downtown District ‐ Corcoran COMMUNITY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 11 Corcoran Southeast District Concept Plan COMMUNITY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 12 Downtown District‐Proposed Uses COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 13 Study Area Location and Characteristics The area under consideration (Southeast District) as Corcoran’s future core commercial district is one mile long from north to south along County Road 116 and about three‐quarters mile wide from east to west between County Road 116 and Maple Hill Road. There are no public schools in the vicinity of the area under consideration. ISD #883 (Rockford Schools) had pro‐ posed however, to develop an elementary school on property near to the commercial district at some time in the future depending on sufficient residential development in the community to support it. The middle and high schools are located in Rockford and are expected to remain in that community for the forseeable future. An elementary school in the immediate area would likely encourage the development of single‐family homes and townhomes as households with young children would find close proximity to an elementary school an desirable amenity. It was mentioned earlier that growth continues to push down from Maple Grove and northwest from Plymouth. Corcoran is trying to anticipate and prepare for additional development as the community increases its housing density and subsequently attracts additional commercial de‐ velopment. The newest developments in the Corcoran commercial district are: Corcoran City Offices – located on 79 acres of land east of County Road 116 in Corcoran. Other commercial and industrial uses in the area were constructed generally in the 1970s and 1980s with some industrial parcels built on in the 1990s. Homesteads that are located along the County Road 116 Corridor were generally constructed in the 1970s. The map on the following page illustrates the location of existing uses in the core commercial area. COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 14 Existing Uses In and Near the Commercial Core of Corcoran COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 15 Existing Land Use As summarized in Table 1, there are a total of 78 tax parcels in the area under consideration as the core commercial district, which, may, in the future, become mixed use. These parcels total nearly 497 acres (excluding right‐of‐way). Combined, these parcels have a total mar‐ ket value according to Hennepin County tax records of $22.1 million in land and building value. As depicted in the following graph, farmland is the predominant land use in the Corridor consuming 22.7% of the area in the Corridor or 112.9 acres, followed by Exempt (govern‐ ment and church property) uses which hold 98.3 acres (20%) of land. Commercial uses oc‐ cupy 20.3 acres (4%) with another 2% of commercial land as vacant (10.4 acres). Industrial uses occupy 47.3 acres of land or 10% of the total acres and single‐family homes (home‐ stead and non‐homestead) comprise 12% of the land area (60.3 acres) in the Corridor. Among all classifications, almost 12 acres are vacant, of which the majority is vacant com‐ mercial land, excluding open farmland. Primay Land Use ParcelsAcresLand ValueBuilding ValueTotal ValueLand Value/SF Farm173.5$50,000$415,300$465,3000.02 Farm‐Land Only5112.9$677,400$0$677,4000.14 Commercial1120.3$1,640,000$2,350,000$3,990,0001.85 Vacant Com.1010.4$616,000$0$616,0001.36 Exempt398.3NA NA N/AN/A Industrial2147.3$3,008,000$7,354,000$10,362,0001.46 Mixed‐Use573.4$773,600$681,000$1,454,6000.24 SF Residential2260.3$1,706,000$2,797,000$4,503,0000.65 Total:78496.5$8,471,000$13,597,300$22,068,300$0.39 Sources: Hennepin County; Maxfield Research & Consulting, LLC TABLE 1 October 2016 LAND USE SUMMARY CORCORAN COMMERCIAL CORE COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 16 Business Mix Table 2 presents the mix of business establishments that currently operate in Corcoran and are located along County Road 116 or just west of County Road 116. Business inventory infor‐ mation was collected by Maxfield Research during a field visit to Corcoran in October 2016. Maxfield Research also sourced the Xceligent Commercial Property Exchange and Hennepin County property information databases for square footage data. In the case of multitenant buildings, the size of each business was estimated based on a visual analysis of the property. A total of 177 businesses was identified in the Corcoran Commercial Corridor. The Construction sector is the largest represented in Corcoran with 32% of all establish‐ ments, followed by the Retail Sector at 17%. Other sectors represented in the Commercial Corridor include: Professional, Scientific, and Technical Services with six establishments (9%); Finance and Insurance, Food Services, Wholesale Trade and Transportation and Warehousing. COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 17 NAICS CodeIndustry Description No. of Businesses Percent of Total 11Agriculture, Natural Resources2313.0% 23Construction5732.2% 31Manufacturing2011.3% 42Wholesale Trade147.9% 44‐45Retail Trade3016.9% 48Transporation and Warehousing126.8% 51Information00.0% 52Finance and Insurance126.8% 53Real Estate and Rental and Leasing42.3% 54Professional, Scientific, and Technical Services63.4% 56Admin, Support, Waste Mgmt, Remediation Svcs00.0% 61Educational Services00.0% 62Health Care and Social Assistance31.7% 72Accommodation and Food Services42.3% 81Other Services158.5% Total:177100.0% Sources: Hennepin County; ESRI Inc.; Maxfield Research & Consulting, LLC TABLE 2 2016 BUSINESS MIX BY INDUSTRY SECTOR CITY OF CORCORAN COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 18 Photos of the Corcoran Commercial Corridor October 2016 Park and Ball Fields‐West of Co. Rd. 116 Restaurant/Bar south of Co. Rd. 10 St. Thomas the Apostle Catholic Church Commercial businesses Industrial Building in Industrial Park Industrial Business in Industrial Park COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 19 Photos of the Corcoran Commercial Corridor October 2016 Liquor Store facing Co. Rd. 116 to the west Commercial businesses located in a strip center, west of Co. Rd. 116 Pet Center business west of Co. Rd. 116 Auto Parts Store and Convenience Items Corcoran City Offices Building‐Scheduled for removal COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 20 Access and Visibility Access and visibility are vital to the success of commercial establishments. County Roads 116 and 101 are major north‐south routes through western Hennepin County, running nearly per‐ pendicular to Interstate 94 and connecting Corcoran to Maple Grove and Rogers on the north and Plymouth and Medina to the south. County Road 10 (Bass Lake Road) is an east‐west route and a key east‐west transportation corridor through northwest central Hennepin County, ex‐ tending from Interstate 494 on the east to County Road 19 on the west and further into Rock‐ ford. The following chart displays estimated traffic volumes (measured in average annual daily trips) in 2005 and 2015 for major roads in and near the commercial core of Corcoran. Overall, traffic in and near the commercial core of Corcoran has increased since 2005. Traffic along County Road 116 has increased between 2005 and 2015, more so to the south than the north. Traffic increases on County Road 10 are primarily to the east rather than west of County Road 116. 2005 AADT2015 AADTNo.Pct. County Road 116 (S. of CR 10)6,9007,3004005.8% County Road 116 (N. of CR 10)5,3006,3001,00018.9% County Road 10 (W. of CR 116)5,5004,550‐950‐17.3% County Road 10 (E. of CR 116)5,3506,20085015.9% County Road 101 (S. of CR 10)4,9759,6004,62593.0% County Road 101 (N. of CR 10)5,4508,9003,45063.3% County Road 10 (W. of CR 101)7,0006,200‐800‐11.4% County Road 10 (E. of CR 101)7,4507,9004506.0% AADT = Average Annual Daily Trips Sources: MnDOT; Maxfield Research & Consulting, LLC SURROUNDING ROAD NETWORK 2005 and 2015 Change '05‐'15 TRAFFIC VOLUME TRENDS COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 21 The following map illustrates drive times from the central core of Corcoran, as measured from the intersection of County Roads 116 and 10. This information is helpful in determining a draw area for various services in the area. It is also useful to determine access to workforce as po‐ tential business operations would likely give strong consideration to commuting patterns when making location decisions. Corcoran Commercial District Drive Time Legend 5 minutes 10 minutes 15 minutes COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 22 Proximity to Shopping, Employment, and Services Development opportunities are partly influenced by proximity to housing, employment, retail, and other services. Corcoran currently has very limited commercial services and residential densities are low, but poised to increase. Major employment concentrations are located near‐ by in Maple Grove and Plymouth as are significant nodes of retail goods and services. There are very few commercial shopping areas located within a three‐mile radius of County Roads 116 and 10. The nearest major retail concentrations are located north of I‐94 at Weaver Lake Road in Maple Grove and south of I‐94 at County Road 30 (WalMart, Home Depot, etc.). These retail shopping districts contain approximately 4.7 million square feet of retail space. The largest is the core commercial district of Maple Grove, which is just over three miles northeast of the commercial core of Corcoran. A Hy‐Vee grocery store is planned for the southeast quadrant of the intersection of County Road 10 and Highway 101 in Maple Grove. While the land has been designated for a commercial retail center for several years, the recession delayed development on that Site until now. Nearby Major Retail Concentrations COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 23 These nearby retail offerings pull potential customers and tenants toward them and away from Corcoran. It is anticipated that as Corcoran grows, there will be a greater hierarchy of commer‐ cial uses (neighborhood‐oriented and specialty uses) that will develop because of increased traffic volumes and a larger household base. As depicted in the following map, Corcoran is located in relative close proximity to sizeable em‐ ployment concentrations, job densities of ranging from 2,035 to a high of 12,887 jobs per square mile in 2014 in a few small areas with significant employment. This is the most recent data available from the United States Census Bureau Longitudinal Employer‐Household Dynam‐ ics (LEHD) program. The highest job densities in the area can be found at established busi‐ ness/industrial parks located along the major transportation corridors. Employment Concentrations COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 24 Several large employers are located in the immediate surrounding communities, including; Thomson Reuters (Maple Grove), Blue Cross Blue Shield (Maple Grove), United States Post Of‐ fice (Maple Grove), Ecolab, Prime Therapeutics (Plymouth), Ryt‐Way Industries (Plymouth), Flint Hills Resources (Rogers), UTC Aerospace (Rogers), Fairview Ridges Hospital (Maple Grove), and the public school districts in the area. There has been little recent commercial development activity in Corcoran. However, a new Hy‐ Vee grocery store will soon be constructed on property located in the southeast quadrant of County Road 10 and Highway 101 in Maple Grove. It is anticipated that the new Hy‐Vee will al‐ so attract several smaller retail outlets on the property as ancillary goods and services to serve the immediate neighborhood. Development on this property is likely to initially overshadow potential commercial development in Corcoran in the short‐term (3 to 5 years) as the area fur‐ ther develops with housing. In order to attract retail goods and services to the area, one of two items are needed: 1) more rooftops (i.e. housing development) and/or 2) more traffic on major roadways. Convenience retail outlets typically locate along high traffic volume corridors where they can capture a higher proportion of drive‐by and impulse purchase traffic. Appropriateness of the Area for Commercial and Mixed‐Use Development The commercial core of Corcoran is situated in an area that is in the path of development push‐ ing out to the west from the core Twin Cities Metro Area. Corcoran has, at this time, a limited population, a viable location for locally‐owned convenience‐ and neighborhood‐oriented retail‐ ers, restaurants, specialty retail, and multifamily residential. Because of the current low resi‐ dential density, retailers may be less likely to consider locating in Corcoran until such time as the community attracts more single‐family and multifamily residential units at traditional sub‐ urban or higher densities. The following summarizes some of strengths and challenges of the current commercial core regarding the development potential in the area. Corcoran Characteristics as Strengths There is plenty of land available at the intersection of County Roads 10 and 116 for devel‐ opment, although new development patterns would likely replace some of the older, exist‐ ing uses. There is little infrastructure available in the area such as sidewalks and pedestrian crossings that would enhance the attractiveness of the location to pedestrians or other passersby. Pedestrian‐oriented improvements are slated to be developed as part of the Southeast District Plan. Traffic moving through the area is largely drive‐through traffic with destination travel for the churches, industrial businesses and limited commercial uses locat‐ ed in the immediate area. The population and household base in Corcoran and adjacent communities is projected to rise, which will support the growing need for commercial goods and services, stimulating demand for new commercial space in the area. It is likely that residential and commercial COMMUNTY OVERVIEW MAXFIELD RESEARCH AND CONSULTING, LLC 25 development will, to a degree, go hand‐in‐hand. But, additional residential units at higher density levels will be required to support more compact and dense development. The business and employment base in Corcoran is growing modestly and is relatively large given Corcoran’s population because of the City’s industrial business park located south of County Road 10 and west of County Road 116. Retail businesses located nearby could po‐ tentially capture sales from the daytime population (employees at these business estab‐ lishments) and those in the area are already doing so. These employees also present a po‐ tential market for current and future residential development in Corcoran. County Road 116, which extends south to Medina, provides good access and visibility to businesses located in the commercial district of Corcoran. Traffic volumes are expected to grow steadily over the next 20 years, increasing the potential customer base for conven‐ ience‐ and automobile‐oriented commercial uses. Retail outlets rely, in part, on customer traffic generated by other non‐commercial uses in the surrounding area, but these uses are currently sparse and include City Hall, St. Thomas Church, ballfields west of the cemetery and Church and several industrial businesses in the Corcoran Industrial Park. Other than City Hall, Corcoran is not really anchored by any significant destination locations other than Stanchion Bar and Mama G’s, a sports bar and grill. Corcoran Characteristics as Challenges County Road 10 currently extends to the northwest past County Road 116. There are plans to realign Count Road 10 east of County Road 116 to Larkin Road on the south, thereby making it the southern boundary of the approved “Downtown District.” This would provide additional land area for a larger development and would better utilize the existing space. At this time, the core area of Corcoran has plenty of land available for future residential and commercial development. The ability of Corcoran to attract additional development de‐ pends on continued economic momentum in western Hennepin County and a clear plan for development of the community. There are several strong retail concentrations located outside of Corcoran in adjacent com‐ munities, primarily Maple Grove and Plymouth. Many commercial businesses considering locations in the area will be drawn to the strong retail activity occurring in or near these re‐ tail centers. It is most likely that additional retail development will occur in Corcoran as the household base expands at urban and suburban densities. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 26 Introduction Demographic characteristics and trends are an important component in assessing the real es‐ tate needs of any given market area. This section of the report begins by delineating the draw area for housing including single‐family, owned multifamily, general occupancy rental and sen‐ ior housing in the Market Area and examines the demographic and economic characteristics of the draw area as they relate to demand for specific housing products. The analysis also presents an overview of housing market conditions, for owned, rental and senior housing in the Market Area. Included are reviews of residential construction trends, rental rate and vacancy rates among general occupancy apartments, residential sales activity, senior housing supply and demand trends, and demand calculations for for‐sale single‐family and owned multifamily, general occupancy market rate apartments and senior housing. Housing Market Area Definition The draw area or primary “Housing Market Area” for for‐sale, rental and senior housing in Cor‐ coran was determined based on geographic and man‐made boundaries, commuting patterns, community orientation, places of employment, and our experience in housing feasibility. Considering these factors, we determined a Housing Market Area (HMA) composed of the fol‐ lowing communities in Hennepin County, Minnesota. - City of Corcoran - City of Maple Grove - City of Plymouth - City of Medicine Lake - City of Hanover - City of Independence - City of Medina - City of Greenfield - City of Loretto - City of Rogers - City of Maple Plain We estimate that 80% of the demand for housing products in Corcoran will be generated from the HMA. The remaining portion of the demand (20%) will come from outside the defined HMA. The map on the following page illustrates Corcoran’s location in the HMA. HO U S I N G M A R K E T A N A L Y S I S MA X F I E L D R E S E A R C H A N D C O N S U L T I N G , L L C 27 Ho u s i n g M a r k e t A r e a HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 28 Population and Household Growth Trends Table 3 presents population and household growth trends in the Market Area from 2000 to 2030. The 2000 and 2010 population and household figures were obtained from the U.S. Cen‐ sus Bureau. The 2016 estimates and projections for 2020, 2025 and 2030 were based on esti‐ mates and forecasts made by the Metropolitan Council (the regional planning organization for the seven‐county Metro Area) and ESRI (a nationally recognized demographics firm) with ad‐ justments made by Maxfield Research to reflect current year data. The following are key points from Table 3. As of 2010, the HMA contained 165,619 people and 63,202 households. Between 2000 and 2010, the population increased 16.5% (23,513) while the number of households expanded 23.9% (12,185). During this time, Corcoran’s population decreased by ‐4.5% (‐251 people) against household growth of 4.7% (83). The proportional change in new households was high relative to population suggesting a trend toward shrinking household sizes in the HMA. In the HMA, the average household size decreased from 2.89 in 2000 to 2.62 in 2010, a de‐ cline of ‐9.3%, while the average household size in Corcoran decreased by ‐8.9% from 3.16 in 2000 to 2.88 in 2010. The trend toward declining household sizes again suggests an aging household base and reflects a general shift in demographic factors that favor smaller households, such as a declining proportion of married couple households with children. For Corcoran, this situation may change as the community adds more residential units targeted to family households. Estimate 200020102016202020252030No.Pct.No.Pct.No.Pct. Housing Market Area142,106165,619180,734191,137204,137217,13723,51316.5%25,51815.4%26,00013.6% City of Corcoran5,6305,3795,4956,7007,8008,900‐251‐4.5%1,32124.6%2,20032.8% Remainder of PMA136,476160,240175,239184,437196,337208,23723,76417.4%24,19715.1%23,80012.9% Hennepin County1,116,2061,152,4251,235,5591,253,290455,2701,327,62036,2193.2%100,8658.8%74,3305.9% Twin Cities Metro Area*2,642,0622,849,5673,018,8053,123,4303,259,2453,388,950207,5057.9%273,8639.6%265,5208.5% Housing Market Area50,91763,10266,38972,06076,65081,24012,18523.9%8,95814.2%9,18012.7% City of Corcoran1,7841,8671,9252,5003,0353,570834.7%63333.9%1,07042.8% Remainder of PMA49,13361,23564,46469,56073,61577,67012,10224.6%8,32513.6%8,11011.7% Hennepin County456,131475,913509,831527,500179,460565,680 19,7824.3%51,58710.8%38,1807.2% Twin Cities Metro Area*1,021,4561,117,7491,194,1451,259,4501,325,2201,378,470 96,2939.4%141,70112.7%119,0209.5% Note: Hassan Township is included in the figures for Rogers from 2010 onward. Sources: US Census Bureau; Metropolitan Council; ESRI; Maxfiel d Research & Consulting, LLC Change 2020‐2030 Population Census TABLE 3 POPULATION AND HOUSEHOLD GROWTH TRENDS AND PROJECTIONS CORCORAN HOUSING MARKET AREA 2000 to 2030 *Includes the 7‐County Area (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties) Households 2000‐20102010‐2020Forecast HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 29 During the 2000s, the pace of population and household growth in the HMA was robust and is expected to remain so between 2010 and 2020, but at modestly reduced growth rates as development activity dropped off sharply due to the recession. While housing development has increased in many of the surrounding communities such as Plymouth, Maple Grove and Medina, Corcoran has not yet experienced much new residential development post‐ Recession. From 2010 to 2016, the number of new households in Corcoran is estimated to have increased by 58 or 3.1%. New home construction increased substantially during 2015 and 2016 with the development of 39 new single‐family homes in 2015 and more than 30 single‐family homes in 2016. Between 2020 and 2030, the HMA is projected to add 26,000 people (13.6%) and 9,180 households (12.7%). The rate of population growth in the HMA is expected to be higher than the Twin Cities Metro Area (8.5% population growth between 2020 and 2030). The rate of population and household growth in Corcoran is projected to outpace the re‐ mainder of the HMA, Hennepin County, and the Twin Cities Metro Area, expanding by 24.6% for population and 33.9% for households between 2010 and 2020. Age Distribution The age distribution of a community’s population helps in assessing the type of housing need‐ ed. For example, younger and older people are more attracted to higher density housing locat‐ ed near urban services and entertainment while middle‐aged people (particularly those with children) traditionally prefer lower‐density single‐family homes. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 30 Table 4 presents the age distribution of the Market Area population from 2000 to 2021. Infor‐ mation from 2000 and 2010 is sourced from the U.S. Census. The 2016 estimates and projec‐ tions for 2021 were calculated by Maxfield Research based on information from ESRI, a reputa‐ ble national demographics firm. The following are key trends about the age distribution of the Market Area’s population. In 2010, the largest adult cohort by age in the HMA was 45 to 54, totaling 29,383 people (17.7% of the total population). We estimate that there are now 28,341 people in this age group, and the cohort is expected to decline roughly ‐4.7% for a loss of ‐1,343 people be‐ tween 2016 and 2021. The loss projected for the 45 to 54 age population in the HMA is a result of the compara‐ tively small number of people who will move into this age group in the next several years, a phenomenon known as the “baby bust.” The “baby bust” is often referred to as the genera‐ tion of children born between 1965 and 1980, an era when the United States birthrate dropped sharply. The 35 to 44 cohort was the second largest age group in the HMA in 2010. In 2016, we es‐ timate there are now 24,457 people (13.5% of the total population) age 35 to 44 in the HMA. This age group is projected to grow 12.3% (+2,996 people) between 2016 and 2021 as the peak of the “echo boom” moves into the 35 to 44 cohort. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 31 The most rapid growth is expected to occur among older adults in the Market Area. Aging of baby boomers led to an increase of 9,661 people (86%) in the 55 to 64 population in the HMA between 2000 and 2010. As this group ages, all cohorts age 55 or greater are ex‐ pected to experience increases in the next several years, particularly the 65 to 74 age group which is projected to grow 31% in the HMA. EstimateProjection Age 2000201020162021No.Pct.No.Pct. City of Corcoran Under‐202,0061,4801,2872,119‐526‐26.283264.6 20 to 242182882823187032.13612.8 25 to 34528396594843‐132‐25.024942.0 35 to 441,2525804901,068‐672‐53.7578118.1 45 to 549381,28790598434937.2798.7 55 to 644338501,13681241796.3‐324‐28.5 65 to 74173355583488182105.2‐96‐16.4 75+821432182896174.47132.5 Total5,6305,3795,4956,920‐251‐4.51,42525.9 Housing Market Area Under‐2044,88846,63748,36849,4711,7493.91,1032.3 20 to 246,5227,6259,3828,9671,10316.9‐415‐4.4 25 to 3419,01220,57621,85723,4081,5648.21,5517.1 35 to 4428,83424,28824,45727,453‐4,546‐15.82,99612.3 45 to 5422,97929,38328,34126,9986,40427.9‐1,343‐4.7 55 to 6411,25520,91625,74627,6989,66185.81,9527.6 65 to 745,4239,81514,47618,9834,39281.04,50731.1 75+3,1936,3798,11610,7603,18699.82,64432.6 Total142,106165,619180,743193,73823,51316.512,9957.2 Twin Cities Metro Area Under‐20768,030774,287789,045804,0826,2570.815,0371.9 20 to 24173,732190,135208,944198,06716,4039.4‐10,877‐5.2 25 to 34411,156420,311433,365442,4329,1552.29,0672.1 35 to 44469,325391,324395,284438,826‐78,001‐16.643,54211.0 45 to 54363,593440,753425,705392,26077,16021.2‐33,446‐7.9 55 to 64200,981326,007386,279408,669125,02662.222,3895.8 65 to 74130,615163,425223,326281,69632,81025.158,37026.1 75+124,630143,325156,857183,55318,69515.026,69717.0 Total2,642,0622,849,5673,018,8053,149,586207,5057.9130,7814.3 Sources: U.S. Census Bureau; ESRI; Maxfield Research & Consulting, LLC Census2000‐20102016‐2021 TABLE 4 AGE DISTRIBUTION CORCORAN HOUSING MARKET AREA 2000 ‐ 2021 Change HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 32 Although younger age groups have traditionally been drawn to rental housing, older adults between the ages of 45 and 64 are exhibiting a greater preference for rental housing due to shifting lifestyles. While the 45 to 54 age group is projected to contract over the next five years, the 55 to 64 cohort is projected to grow 7.6% in the HMA, adding 1,952 people. The younger age groups are the primary target market for rental housing and they continue to exhibit the highest proportions of renters in the Twin Cities. In the HMA, the 25 to 34 age population is expected to increase 7.1% (1,551) between 2016 and 2021. The 20 to 24 age group, however, is projected to contract ‐4.4% (‐415 people) by 2021. Household Income Household income data is important when considering the ability of households to pay differ‐ ent rent levels. In general, housing costs of up to 30% of income are considered affordable by the Department of Housing and Urban Development (HUD). Table 5 presents data on household income by age of householder for the Housing Market Area in 2016 and 2021. The data is estimated by ESRI and adjusted by Maxfield Research to reflect the most current local household estimates and projections. The following are key points. In 2016, the median household income was estimated to be $83,546 in the HMA and $70,404 in the Metro Area. As such, it appears that HMA residents are relatively affluent compared to the rest of the Metro Area and have more resources to devote toward housing than residents elsewhere in the Metro. Median incomes are expected to increase 12.4% over the next several years to $93,872 in the HMA compared to 13.6% growth in the Metro Area. The average annual increase be‐ tween 2016 and 2021 in the PMA (2.5%) will exceed the historical annual inflation rate of 2.0% over the past ten years. As households age through the lifecycle, household incomes tend to peak in their late 40s and early 50s. This trend is evident in the Market Area as the age 45 to 54 cohort has the highest estimated income at $104,569 in the HMA and $92,965 in the Metro Area. Except for the 45 to 54 age group, all other age groups are expected to grow between 2016 and 2021 in the HMA. The 35 to 44 and 65 to 74 age groups are projected to experience the largest increases, adding 2,530 households (+11.6%) and 3,486 households (+28.6%), re‐ spectively. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 33 Rental housing often targets younger renter households. The median household income in the HMA is $54,305 for the under‐25 age group and $84,158 for the 25 to 34 age group. Households earning the median income for these age groups could afford monthly housing costs estimated at $1,357 and $2,104, respectively. Total<2525‐3435‐4445‐5455‐6465 ‐7475+ Less than $15,0002,339117356289287459299532 $15,000 to $24,9992,602140336424262378467595 $25,000 to $34,9993,274149497806377418428598 $35,000 to $49,9995,9112279271,558677771827925 $50,000 to $74,99910,3092981,6921,8881,7181,9041,6871,122 $75,000 to $99,99910,8391821,6672,8512,1872,2991,308345 $100,000 to $199,99921,3612422,9764,7335,8234,8092,146633 $200,000 or more9,754576542,1303,2052,563936210 Total66,3891,4119,10714,67914,53513,6018,0974,960 Median Income$97,428$54,305$84,158$110,036$119,868$106,434$80,097$46,380 Less than $15,0002,547148381275243408393699 $15,000 to $24,9992,555143316274180334536772 $25,000 to $34,9992,642130421378249339442683 $35,000 to $49,9995,3622418897875637139711,198 $50,000 to $74,9997,8272381,2591,2151,0471,3501,5201,198 $75,000 to $99,99912,0982382,0322,3002,2522,7042,010562 $100,000 to $199,99927,8933183,9566,2116,4726,1313,5671,238 $200,000 or more12,055718652,6703,3943,1471,521387 Total72,9781,52710,11914,11014,40015,12610,9606,737 Median Income$106,767$58,516$96,127$119,504$130,943$117,500$93,788$50,227 Less than $15,0002083125‐14‐44‐5194167 $15,000 to $24,999‐473‐20‐150‐82‐4469177 $25,000 to $34,999‐632‐19‐76‐428‐128‐791485 $35,000 to $49,999‐54914‐38‐771‐114‐58144273 $50,000 to $74,999‐2,482‐60‐433‐673‐671‐554‐16776 $75,000 to $99,9991,25956365‐55165405702217 $100,000 to $199,9996,532769801,4786491,3221,421605 $200,000 or more2,30114211540189584585177 Total6,5891161,012‐569‐1361,5252,8631,777 Median Income$9,339$4,211$11,969$9,468$11,075$11,066$13,691$3,847 Sources: ESRI; US Census Bureau; Maxfield Research & Consulting, LLC 2016 2021 Change 2016 ‐ 2021 TABLE 5 HOUSEHOLD INCOME BY AGE OF HOUSEHOLDER HOUSING MARKET AREA 2016 & 2021 Age of Householder HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 34 Households in the 35 to 44 age group that may delay buying a home could afford a monthly rent of $2,751, based on the median household income for that age group of $110,036. Based on average pricing of $1,350 for one‐bedroom units in the competitive set of newer rental properties in the HMA, a household will need to have an annual income of roughly $54,000 or greater to not exceed 30% of its monthly income on housing costs. In 2016, approximately 50,201 HMA households (76% of the total) are estimated to have had incomes of at least $54,000. By 2021, total income‐qualified households are projected to increase to 58,308 households (16.2%) after accounting for inflation. Households under the age of 35 are most likely to rent their housing, although there is a growing group of households over age 35 that are choosing to rent for lifestyle reasons. In 2016, 52% of households age 24 and below and 74% of households age 25 to 34 in the HMA are estimated to have had incomes of at least $54,000. Additionally, because younger householders are often willing to live with roommates, the percent income‐qualified is likely somewhat higher. Between 2016 and 2021, the number of HMA households in the 25 to 34 age cohort is ex‐ pected to increase by 1,192 income‐qualified households (28.6%). The number of income‐ qualified households in the age 24 or younger cohort is projected to increase by 96 house‐ holds during this same time period. Income‐qualified households in the age 35 to 44 cohort are projected to increase 8% (902) while the 45 to 54 age cohort experiences a 2.6% increase (339 households). The number of income‐qualified households in the 55 to 64 age group is expected to grow 14% (1,846) while a 49% jump (2,848) in the 65 to 74 cohort is anticipated. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 35 The median sale price for a single‐family home in the HMA was $336,000 (2016). Assuming that a potential homebuyer has good credit and makes a 10% down payment, a household would need to have a minimum annual income of roughly $60,000 annually to be income‐ qualified for a home purchased at the median sale price in the HMA without having addi‐ tional equity to apply toward the home purchase price. In 2016, an estimated 77% of non‐senior HMA households were estimated to have incomes of $60,000 or higher. The number of income‐qualified households in the HMA is projected to increase 3% by 2021 to 80% of non‐senior HMA households after accounting for inflation, with the greatest growth occurring in the 35 to 44 (1,836 households) and 55 to 64 (1,743 households) age groups. Household Tenure Table 6 shows household tenure by age of householder for the City of Corcoran, the HMA and the Metro Area in 2010 and 2015. Data for 2010 is obtained from the Decennial Census, while the 2015 data is an estimate from the 2011‐2015 American Community Survey. The table shows the number and percent of renter‐ and owner‐occupied housing units in the Market Ar‐ ea. Data excludes unoccupied units and group quarters such as dormitories and nursing homes. Household tenure information is important in understanding households’ preferences to rent or own their housing. In addition to preferences, contributing factors include mortgage interest rates, household age, and lifestyle considerations, among others. In 2014, 86.8% of all households in Corcoran owned, giving it a homeownership rate that was higher than the HMA (78.6% of all households owned in 2014) and substantially higher the Metro Area (68.8% homeownership rate). Within the prime ownership years (35 to 64), 89.2% of households in Corcoran owned in 2014, higher than 85.2% in the HMA and 76.6% in the Metro Area. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 36 Typically, the youngest and oldest households rent their housing in greater proportions than middle‐age households. This pattern is apparent among younger Market Area households as 45.6% of the population under the age of 35 rents in the HMA while 59.1% of Metro Area householders under the age of 35 rent. In Corcoran, only 11% of households under the age of 35 rented in 2015. An estimated 0% of households under age 25 rented in Corcoran in 2015 while 12% of households age 25 to 34 rented. These percentages are substantially lower than the HMA which had 81.6% of households under age 25 and 42.6% of age 25 to 34 households renting in 2015. HO U S I N G M A R K E T A N A L Y S I S MA X F I E L D R E S E A R C H A N D C O N S U L T I N G , L L C 37 Ag e N o . P c t . N o . P c t . N o . P c t . N o . P c t . N o . P c t . N o . P c t . Un d e r 2 5 Ow n 1 0 4 7 . 6 8 1 0 0 . 0 3 0 7 2 1 . 1 1 6 1 1 8 . 4 7 , 9 4 7 1 6 . 0 4 , 9 6 3 1 1 . 6 Re n t 1 1 5 2 . 4 0 0 . 0 1 , 1 4 9 7 8 . 9 7 1 3 8 1 . 6 4 1 , 7 8 9 8 4 . 0 3 7 , 7 6 4 8 8 . 4 To t a l 2 1 1 0 0 . 0 8 1 0 0 . 0 1 , 4 5 6 1 0 0 . 0 8 7 4 1 0 0 . 0 4 9 , 7 3 6 1 0 0 . 0 4 2 , 7 2 7 1 0 0 . 0 25 ‐ 3 4 Ow n 1 0 3 7 8 . 0 8 8 8 8 . 0 5 , 6 2 6 5 9 . 0 5 , 9 8 3 5 7 . 4 1 0 2 , 2 3 6 5 0 . 6 9 8 , 9 9 1 4 6 . 7 Re n t 2 9 2 2 . 0 1 2 1 2 . 0 3 , 9 0 3 4 1 . 0 4 , 4 4 6 4 2 . 6 9 9 , 7 1 6 4 9 . 4 1 1 2 , 7 5 9 5 3 . 3 To t a l 1 3 2 1 0 0 . 0 1 0 0 1 0 0 . 0 9 , 5 2 9 1 0 0 . 0 1 0 , 4 2 9 1 0 0 . 0 2 0 1 , 9 5 2 1 0 0 . 0 2 1 1 , 7 5 0 1 0 0.0 35 ‐ 4 4 Ow n 2 4 0 8 7 . 9 3 1 1 9 5 . 7 1 0 , 6 0 6 8 1 . 5 1 0 , 3 8 6 7 7 . 1 1 5 4 , 6 7 8 7 2 . 3 1 4 3 , 8 8 6 6 8 . 1 Re n t 3 3 1 2 . 1 1 4 4 . 3 2 , 4 1 4 1 8 . 5 3 , 0 9 1 2 2 . 9 5 9 , 3 0 3 2 7 . 7 6 7 , 4 0 1 3 1 . 9 To t a l 2 7 3 1 0 0 . 0 3 2 5 1 0 0 . 0 1 3 , 0 2 0 1 0 0 . 0 1 3 , 4 7 7 1 0 0 . 0 2 1 3 , 9 8 1 1 0 0 . 0 2 1 1 , 2 8 7 1 00.0 45 ‐ 5 4 Ow n 6 2 9 9 4 . 4 5 6 8 9 3 . 1 1 4 , 4 8 1 8 7 . 9 1 3 , 5 1 6 8 6 . 8 2 0 2 , 4 0 4 7 9 . 8 1 9 2 , 1 9 8 7 8 . 4 Re n t 3 7 5 . 6 4 2 6 . 9 1 , 9 9 2 1 2 . 1 2 , 0 4 8 1 3 . 2 5 1 , 3 7 9 2 0 . 2 5 2 , 8 5 5 2 1 . 6 To t a l 6 6 6 1 0 0 . 0 6 1 0 1 0 0 . 0 1 6 , 4 7 3 1 0 0 . 0 1 5 , 5 6 4 1 0 0 . 0 2 5 3 , 7 8 3 1 0 0 . 0 2 4 5 , 0 5 3 1 00.0 55 ‐ 6 4 Ow n 4 6 7 9 8 . 7 5 2 9 1 0 0 . 0 1 1 , 0 9 4 9 0 . 7 1 2 , 3 5 3 8 9 . 9 1 6 2 , 5 9 5 8 2 . 6 1 7 4 , 7 9 4 8 0 . 9 Re n t 6 1 . 3 0 0 . 0 1 , 1 4 2 9 . 3 1 , 3 9 0 1 0 . 1 3 4 , 3 5 5 1 7 . 4 4 1 , 3 8 3 1 9 . 1 To t a l 4 7 3 1 0 0 . 0 5 2 9 1 0 0 . 0 1 2 , 2 3 6 1 0 0 . 0 1 3 , 7 4 3 1 0 0 . 0 1 9 6 , 9 5 0 1 0 0 . 0 2 1 6 , 1 7 7 1 00.0 65 + Ow n 2 9 1 9 6 . 4 3 3 9 9 6 . 9 8 , 6 6 8 8 3 . 4 1 1 , 0 9 4 8 3 . 3 1 5 2 , 6 1 5 7 5 . 8 1 7 0 , 5 8 0 7 6 . 4 Re n t 1 1 3 . 6 1 1 3 . 1 1 , 7 2 0 1 6 . 6 2 , 2 2 0 1 6 . 7 4 8 , 7 3 2 2 4 . 2 5 2 , 5 8 0 2 3 . 6 To t a l 3 0 2 1 0 0 . 0 3 5 0 1 0 0 . 0 1 0 , 3 8 8 1 0 0 . 0 1 3 , 3 1 4 1 0 0 . 0 2 0 1 , 3 4 7 1 0 0 . 0 2 2 3 , 1 6 0 1 00.0 TO T A L Ow n 1 , 7 4 0 9 3 . 2 1 , 8 4 3 9 5 . 9 5 0 , 7 8 2 8 0 . 5 5 3 , 4 9 3 7 9 . 4 7 8 2 , 4 7 5 7 0 . 0 7 8 5 , 4 1 2 6 8 . 3 Re n t 1 2 7 6 . 8 7 9 4 . 1 1 2 , 3 2 0 1 9 . 5 1 3 , 9 0 8 2 0 . 6 3 3 5 , 2 7 4 3 0 . 0 3 6 4 , 7 4 2 3 1 . 7 To t a l 1 , 8 6 7 1 0 0 . 0 1 , 9 2 2 1 0 0 . 0 6 3 , 1 0 2 1 0 0 . 0 6 7 , 4 0 1 1 0 0 . 0 1 , 1 1 7 , 7 4 9 1 0 0 . 0 1 , 150,154100.0 So u r c e s : U . S . C e n s u s B u r e a u ; M a x f i e l d R e s e a r c h & C o n s u l t i n g , L LC TA B L E 6 TE N U R E B Y A G E O F H O U S E H O L D E R CO R C O R A N H O U S I N G M A R K E T A R E A 20 1 0 & 2 0 1 5 20 1 0 20 1 0 20 1 5 Ci t y o f C o r c o r a n 2015 Tw i n C i t i e s M e t r o A r e a Ho u s i n g M a r k e t A r e a 20 1 0 2 0 1 5 HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 38 The percentage of HMA renter households increased for most age cohorts between 2010 and 2015 as the total number of renter households residing in the HMA grew by an esti‐ mated 1,588 households, an increase of 12.9%. By comparison, the number of owner households increased 5.3% (2,711 households) between 2010 and 2015. As depicted in the following chart, the largest overall increase occurred in the 65 and older age group in the HMA, as 500 renter households were added (29.1%) and the number of owner households expanded 28% (2,426 households). Substantial renter household growth also occurred in the 35 to 44 cohort with the addition of 677 renter households (28%). Notable renter household growth also occurred in the 25 to 34 age group, adding 543 renter households (14%). In contrast to the HMA, Corcoran experienced stronger owner household growth and lost renter households. The largest overall increase occurred in the 35 to 44 age group in Corcoran, as the number of owner households expanded by 30% (71 households). The 55 to 64 and the 65 and over household groups also increased between 2010 and 2015; the remaining household groups decreased. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 39 Household Type Table 7 below shows household type trends in City of Corcoran compared to the HMA and the Metro Area in 2010 and 2015. Data for 2010 is obtained from the Decennial Census, while the 2015 data is an average estimate from the 2011‐2015 American Community Survey. Key points follow the table Shifting household types can stimulate demand for a variety of housing products. Married cou‐ ple families typically generate demand for single‐family detached ownership housing, while married couples without children often desire multifamily housing for convenience reasons. Married couple families without children are generally made up of younger couples that have not had children (and may not have children) and older couples with adult children that have moved out of the home. Other family households, defined as a male or female householder with no spouse present (typically single‐parent households), often require affordable housing. 201020152010201520102015 Total Households1,8671,92262,55467,4011,117,7491,150,154 Non‐Family Households32433217,46118,329410,253419,399 Living Alone23230113,87214,930319,030331,010 Other (Roommates)92313,5893,39991,22388,389 Family Households1,5431,59045,09349,072707,496730,755 Married w/ Children50550817,92418,525244,687247,506 Married w/o Children86291920,23723,369298,723316,180 Other Family1761636,9327,178164,086167,069 Change (2010 ‐2014) No.Pct.No.Pct.No.Pct. Total Households552.9%4,8477.7%32,4052.9% Non‐Family Households82.5%8685.0%9,1462.2% Living Alone6929.7%1,0587.6%11,9803.8% Other (Roommates)‐61‐66.3%‐190‐5.3%‐2,834‐3.1% Family Households473.0%3,9798.8%23,2593.3% Married w/ Children30.6%6013.4%2,8191.2% Married w/o Children576.6%3,13215.5%17,4575.8% Other Family‐13‐7.4%2463.5%2,9831.8% Sources: U.S. Census; ESRI; Maxfield Research & Consulting, LLC City of CorcoranTwin Cities Metro Area TABLE 7 HOUSEHOLD TYPE CORCORAN HOUSING MARKET AREA 2010 & 2015 Housing Market Area HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 40 In 2015, family households comprised 82.6% of all households in Corcoran, 72.8% in the HMA, and 63.5% of all Metro Area households. Family households experienced relatively strong expansion in the HMA between 2010 and 2015, increasing 8.8% (3,979 households), and increased in Corcoran by 47 households (3.0%). By comparison, the Metro Area experi‐ enced a 3.3% increase in family households between 2010 and 2015. Corcoran experienced a 0.6% increase in the number of married couples with children, growing by 3 households. The number of married couples without children increased 6.6% (57 households), while Other Family households decreased by ‐7.4% (‐13 households) be‐ tween 2010 and 2015. An increase of 3.4% in the number of married couples with children occurred in the HMA, gaining 601 households, while the number of married couples without children expanded 15.5% (3,132 households). Other family households expanded 3.5% (246 households) be‐ tween 2010 and 2015 in the HMA. Between 2010 and 2015, non‐family households essentially remained stable in Corcoran and increased by 5.0% (868 households) in the HMA. By comparison, 2.2% growth in non‐ family households occurred in the Metro Area between 2010 and 2015. An increase in non‐ family households indicates a shift in housing needs that favors rental development. How‐ ever, households composed of unrelated roommates can also be unmarried couples that may choose to own and can often afford to own if they are double‐income. The number of single‐person households increased by 29.7% (69 households) in Corcoran between 2010 and 2015, while the number of roommate households decreased by ‐61 households (‐66.3%). HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 41 The HMA experienced 7.6% growth in single‐person households between 2010 and 2015, while the Metro Area experienced 3.8% growth in one‐person households. The number of roommate households decreased by ‐5.3% in the HMA and ‐3.1% in the Metro Area during that time period. This shift toward “unbundling” is likely a response to the economic recovery after more roommate households were formed during the recession as people attempted to save money on housing costs by living together. The composition of household types in the HMA is similar to the Metro Area, although Cor‐ coran has a much higher proportion of married couples without children. The Metro Area has notably higher proportions of persons living alone relative to Corcoran and the HMA. Employment Trends Employment characteristics are an important component in assessing housing needs in any giv‐ en market area. These trends are important to consider since employment growth often fuels household growth. Typically, households prefer to live near work for convenience, which is a primary factor in choosing a housing location. This preference is particularly true among renters. Young adults entering the workforce, a primary target market for rental housing, often place great value on living near employment, education, shopping, and entertainment. Employment Growth Table 8 on the following page shows employment growth trends and projections from 2000 to 2030 based on the most recent information available from the Minnesota Department of Em‐ ployment and Economic Development (DEED) and the Metropolitan Council. Data for 2000, 2010, and 2016, represents the annual average employment for that year. Employment projec‐ tions for 2020 and 2030 are sourced from the Metropolitan Council. Although employment growth often parallels population growth, it often is tied more strongly to transportation access. Cities with interstate access and intra‐ and inter‐metro transportation connections attract more businesses and post higher employment gains. Employment growth can fuel household and population growth as people generally desire to live near their work. In 2000, there were 1,062 jobs in Corcoran and 101,484 jobs in the HMA. Employment in Corcoran decreased 32% (‐509 jobs) by 2010, while the number of jobs in the Remainder of the HMA decreased ‐11.1% (‐11,090 jobs). By comparison, the Twin Cities Metro Area ex‐ perienced a ‐4% decline in employment during the decade. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 42 Data from the Quarterly Census of Employment and Wages indicates that the HMA gained 17,139 jobs (19.1%) between 2010 and 2016 and Corcoran gained (313 jobs or 28.6%). In the Remainder of the HMA, there has been an increase of 16,826 jobs (18.9%) during the same time period. The number of jobs in the Metro Area increased by 11.2%. Solid job growth is expected in the HMA Market Area between 2010 and 2020. The HMA is projected to experience a 27% gain during the decade (24,391 jobs), while Metro Area em‐ ployment grows 16.5%. In the HMA, Corcoran is projected to add 607 jobs (56%). Strong employment growth has occurred coming out of the recession as jobs lost were re‐ placed and employers have been willing to hire as the economy has improved. Employers are likely being forced into hiring as many reduced their workforces significantly during the recession and can no longer keep pace with demand for their products or ser‐ vices without increasing their number of employees. Another 310 jobs (18%) are expected to be added in Corcoran between 2020 and 2030, while HMA employment is forecast to expand 9.3% (10,614 jobs) and Metro Area employ‐ ment increases 4.2%. The pace of job growth is projected to slow after 2020, as the region is expected to experience a surge in retirements and potential labor force shortages. In the HMA, job growth will likely be focused along the major transportation corridors; pri‐ marily I‐94/I‐494, Highway 55 and potentially Highway 610 where there are large concen‐ trations of existing businesses and convenient highway access. Annual Employment 2000 2005 2010 2016 2020 Forecast 2030 Forecast ChangeNo.Pct.No.Pct.No.Pct.No.Pct. 2000 ‐ 2010 ‐509‐31.8%‐11,599‐11.4%‐11,090‐11.1%‐63,700‐4.0% 2010 ‐ 2016 31328.6%17,13919.1%16,82618.9%172,49811.2% 2016 ‐ 202029420.9%7,2526.8%6,9586.6%81,5414.8% Sources: MN DEED; Metropolitan Council; Maxfield Research & Consulting, LLC 122,880 99,882 96,475 88,792 105,618 112,576 City of Corcoran Housing Market Area TABLE 8 EMPLOYMENT GROWTH TRENDS AND PROJECTIONS CORCORAN HOUSING MARKET AREA 2000 to 2030 Twin Cities Metro Area Remainder of HMA 1,406107,024 2,010124,890 1,602101,484 1,30897,783 1,09389,885 1,700114,276 1,600,741 1,593,692 1,537,041 1,709,539 1,913,050 1,791,080 HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 43 Resident Employment Table 9 on the following page shows information on the resident labor force and employment in Hennepin County compared to the Twin Cities and Minnesota. The data is sourced from the Minnesota Department of Employment and Economic Development (DEED). Resident em‐ ployment data reveals the work force and number of employed people living in the area. It is important to note that not all of these individuals necessarily work in the area. The points following the table summarize key employment trends that will impact the demand potential for housing in the Market Area. Hennepin County’s labor force increased 2.6% (17,008) between 2000 and 2016, represent‐ ing an annual average growth rate of 14.8%. By comparison, resident employment in the County expanded 1.9% between 2000 and 2016 (12,437), equating to an annual rate of 11.2%. Year Labor Force Employed Residents UE Rate Labor Force Employed Residents UE Rate Labor Force Employed Residents UE Rate 2016683,629661,0083.3%1,667,1601,610,4853.4%2,999,3052,856,6904.8% 2015679,549657,2293.3%1,656,9511,601,5713.3%3,010,3662,898,8633.7% 2014674,658649,1943.8%1,644,2571,581,2673.8%2,982,7502,858,5924.2% 2013669,800639,2954.6%1,632,5001,557,0544.6%2,971,5232,824,9694.9% 2012662,562628,0115.2%1,616,5511,530,2375.3%2,958,2722,793,1435.6% 2011656,064616,3326.1%1,603,5211,504,0846.2%2,946,2782,755,2636.5% 2010650,891605,2947.0%1,593,3861,479,3867.2%2,938,7952,721,1947.4% 2009656,192608,5407.3%1,601,8711,482,6677.4%2,941,9762,713,4267.8% 2008656,957624,6444.9%1,603,5011,522,5895.0%2,925,0882,766,3425.4% 2007655,691629,0054.1%1,597,1231,530,5754.2%2,906,3892,773,7044.6% 2006649,356626,2233.6%1,585,8591,528,1973.6%2,887,8312,772,1144.0% 2005652,568628,5953.7%1,585,0471,526,4903.7%2,879,7592,762,7324.1% 2004657,468628,4794.4%1,584,8381,515,7154.4%2,880,4272,745,6144.7% 2003660,470629,6994.7%1,581,9071,509,3054.6%2,874,6632,734,2874.9% 2002661,528632,3744.4%1,574,0371,506,8344.3%2,859,6012,731,0804.5% 2001666,946643,8653.5%1,573,9921,520,8983.4%2,845,2022,737,9603.8% 2000666,621648,5712.7%1,563,2931,521,4142.7%2,812,9472,724,1173.2% Sources: Minnesota DEED; Maxfield Research & Consulting, LLC TABLE 9 LABOR FORCE AND RESIDENT EMPLOYMENT TRENDS CORCORAN HOUSING MARKET AREA 2000 through 2016 Hennepin Count y MinnesotaTwin Cities Metro Area HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 44 In Hennepin County, the labor force and employment increased by year‐end 2016. The simultaneous decreases in the labor force and the employment bases resulted in a contin‐ ued reduction in the unemployment rate to 3.3%, stable between 2015 and 2016. The size of Hennepin County’s labor force decreased from 666,621 people in 2000 to 650,891 people in 2010, a decrease of ‐2.4%. From 2010 through 2016, the labor force in‐ creased by 32,738, 5.0% as of the end of 2016. Resident employment in the County fluctuated between 2000 and 2006, but then made a gradual decline through 2010 due to the recession (‐1.3% annually). Since 2010, Hennepin County has experienced steady gains in resident employment, expanding at an average rate of 1.3% per year. Increased hiring post‐recession drove the unemployment rate down throughout the Market Area as the number of employed residents has outpaced labor force growth since 2010. Hennepin County’s labor force expanded 5.0% (32,738) between 2010 and 2016, while the number of employed residents increased by 9.2% (12,437). By comparison, employment in the Twin Cities grew 5.9% against labor force growth of 6.6% between 2010 and 2016. The following chart illustrates how unemployment in the County has mirrored national trends but remains well below the national rate over the past several years. The Hennepin County unemployment rate has consistently tracked with unemployment trends in Minne‐ sota and the Twin Cities Metro Area. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 45 With a 3.3% unemployment rate at the end of 2016, unemployment in the County is equal to the unemployment rate in the Twin Cities (3.4%) and the State of Minnesota (3.9%), but still lower than the United States (4.9%). Industry Employment and Wage Data Table 10 displays information on the employment and wage situation in the City of Corcoran compared to the HMA and the Twin Cities Metro Area. The Quarterly Census of Employment and Wages (QCEW) data is sourced from DEED for the first quarters of 2015 and the 3rd Quarter of 2016, which is the most recent data available. All establishments covered under the Unemployment Insurance (UI) Program are required to report wage and employment statistics to DEED quarterly. Certain industries in the table may not display any information which means that there is either no reported economic activity for that industry or the data has been suppressed to protect the confidentiality of cooperating em‐ ployers. This generally occurs when there are too few employers or one employer comprises too much of the employment in that geography. The HMA gained 9,630 jobs (9.9%) between the first quarter of 2015 and the third quarter of 2016, most notably in the Trade, Transportation and Utilities, Financial Activities and Pro‐ fessional and Business Services sectors. In Corcoran, total employment increased 42.5% (419 jobs) during the same time period. Metro Area employment expanded 4.5% during the period. The Construction sector is the largest employment sector in Corcoran, providing 653 jobs (46.4% of total employment), followed by Professional and Business Services sector with 160 jobs (11.4%) and Wholesale Trade with 146 jobs (9.1%). Trade, Transportation, and Utilities is the largest employment sector in the HMA with 26,924 jobs (25.2% of total employment), followed by Manufacturing with 19,007 jobs (17.8%). HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 46 The number of business establishments in Corcoran decreased by one business, while the HMA increased by 42 businesses. Increases in the HMA occurred in Construction, Manufac‐ turing, Financial Activities, and Public Administration sectors. Average weekly wages in Corcoran ($966) are roughly 5% higher than the HMA ($923) and 21.2% higher than the Twin Cities ($1,171). Wages receded between 1st Quarter 2015 and 3rd Quarter 2016 in the Twin Cities Metro Area and in the HMA, but increased by 13.0% in Corcoran. In Corcoran, highest average weekly wages are found in the Construction ($1,068) sector followed by Wholesale Trade ($1,028), while highest wages in the HMA are in Information ($1,657) and Manufacturing ($1,491). 0%10%20%30%40%50% Natural Resources & Mining Construction Manufacturing Wholesale Trade Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Public Administration 2016 Q3 Employment: % of Total Corcoran HMA Twin Cities HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 47 A household earning the average weekly wage in the HMA ($923) would be able to afford an apartment renting for approximately $1,200 per month to not exceed 30% of its monthly income on housing costs, considerably lower than the average rent for one‐bedroom units in the competitive set of newer rental properties in the HMA ($1,557). Assuming that a potential home buyer has good credit and makes a 10% down payment, a household earning the average wage in the HMA ($923) would be able to purchase a home priced at approximately $168,000 or lower to not be cost‐burdened (paying more than 30% of their income for housing). This is considerably lower than the 2016 median sale price of homes in the HMA ($336,000) as of year‐end 2016. Therefore, households would require some equity in a previous home or a higher downpayment to afford the average house in the Housing Market Area. $0$500$1,000$1,500$2,000 Total, All Industries Natural Resources & Mining Construction Manufacturing Trade, Transportation, Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Public Administration 2016 Q3 Average Weekly Wage Corcoran HMA Twin Cities HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 48 Industry Establish‐ ments Employ‐ ment Weekly Wage Establish‐ ments Employ‐ ment Weekly Wage Total, All Industries144987$8551431,406$96641942.5%$111 13.0% Natural Resources & Mining535$431442$584720.0%$153 35.5% Construction47419$1,07047653$1,19923455.8%$129 12.1% Manufacturing863$790852$1,022‐11‐17.5%$232 29.4% Wholesale Trade13123$98313146$1,0312318.7%$48 4.9% Retail Trade1161$606970$632914.8%$26 4.3% Transportation/Warehousing415$596418$765320.0%$169 28.4% Information‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Financial Activities‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Professional & Business Services1596$76030160$8966466.7%$136 17.9% Education & Health Services387$378‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Leisure & Hospitality543$2516121$28778181.4%$36 14.3% Other Services1555$5541466$5071120.0%($47)‐8.5% Public Administration126$891126$1,17500.0%$284 31.9% Total, All Industries5,24697,360$9855,288106,990$9239,6309.9%($62)‐6.3% Natural Resources & Mining461,692$65134332$522‐1,360‐80.4%($129)‐19.8% Construction3644,098$1,0913775,480$1,1941,38233.7%$103 9.5% Manufacturing39718,734$1,20840219,007$1,1482731.5%($60)‐5.0% Trade, Transportation, Utilities1,12722,665$1,5801,12026,924$9494,25918.8%($631)‐40.0% Information831,066$1,86879928$1,537‐138‐12.9%($332)‐17.7% Financial Activities4684,776$1,7184986,544$1,1211,76837.0%($597)‐34.7% Professional & Business Services1,11915,062$1,1601,08616,670$1,1151,60810.7%($45)‐3.8% Education & Health Services54214,331$90653813,009$607‐1,322‐9.2%($299)‐33.0% Leisure & Hospitality3838,131$3673779,115$36998412.1%$2 0.5% Other Services5162,972$6165093,170$5831986.7%($33)‐5.3% Public Administration172,368$750192,687$82731913.5%$77 10.3% Total, All Industries77,0941,636,505$1,24075,9691,709,539$1,171 73,0344.5%($69)‐5.6% Natural Resources & Mining2982,564$9602953,953$876 1,38954.2%($84)‐8.8% Construction6,30657,221$1,2606,12273,075$1,346 15,85427.7%$86 6.8% Manufacturing4,041166,759$1,4743,973170,684$1,508 3,9252.4%$34 2.3% Trade, Transportation, Utilities15,627306,419$1,03515,265320,438$990 14,0194.6%($45)‐4.3% Information1,35238,542$1,6931,29237,752$1,512 ‐790‐2.0%($181)‐10.7% Financial Activities8,320134,495$2,5738,231131,093$1,657 ‐3,402 ‐2.5%($916)‐35.6% Professional & Business Services15,009271,177$1,68214,515292,866$1,602 21,6898.0%($80)‐4.8% Education & Health Services9,746382,213$9099,838372,964$985 ‐9,249‐2.4%$76 8.4% Leisure & Hospitality6,980155,625$4237,121177,030$483 21,40513.8%$60 14.2% Other Services8,55954,483$6388,51457,607$697 3,1245.7%$59 9.2% Public Administration85667,002$1,14180372,253$1,232 5,2517.8%$91 8.0% Sources: Minnesota Department of Employment and Economic Devel opment; Maxfield Research & Consulting, LLC TWIN CITIES METRO CITY OF CORCORAN HOUSING MARKET AREA TABLE 10 QUARTERLY CENSUS OF EMPLOYMENT AND WAGES CORCORAN HOUSING MARKET AREA Employment # % Wage # % Change 2015 Q1 ‐ 2016 Q32016 Q32015 Q1 HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 49 Commuting Patterns Proximity to employment is often a primary consideration when choosing where to live, par‐ ticularly for younger and lower income households since transportation costs often account for a greater proportion of their budgets. Table 11 highlights the commuting patterns of workers in Corcoran based on data from the U.S. Census Bureau Longitudinal Employer‐Household Dy‐ namics (LEHD) program for 2014, the most recent data available. As the table illustrates, an estimated 89% of the workers employed in the City of Corcoran reside outside the City, while 11% live in the City. The largest proportions of workers in Corcoran commute from Maple Grove (6.6%), followed by St. Michael (6.5%), Plymouth (5.6%), and Rogers (5.5%). Approximately 33% of the workers in Corcoran reside within ten miles of their place of em‐ ployment while 46% travel from 10 to 24 miles. Roughly 15% of the workers commute from a distance of 25 to 50 miles while 5% come from more than 50 miles away. Place of Residence Count Share Place of Employment Count Share Corcoran city, MN10010.8%Minneapolis city, MN33711.8% Maple Grove city, MN756.6%Plymouth city, MN2799.7% St. Michael city, MN476.5%Maple Grove city, MN2078.8% Plymouth city, MN415.6%Medina city, MN1137.9% Rogers city, MN365.5%Minnetonka city, MN1077.6% Brooklyn Park city, MN304.3%Corcoran city, MN1006.7% Buffalo city, MN294.0%Bloomington city, MN795.6% Minneapolis city, MN253.2%St. Louis Park city, MN713.0% Champlin city, MN232.7%St. Paul city, MN692.3% Albertville city, MN202.7%Golden Valley city, MN641.7% All Other Locations71348.2%All Other Locations1,21534.8% Distance Traveled Count Share Distance Traveled Count Share Total Primary Jobs1,139100.0%Total Primary Jobs2,641100.0% Less than 10 miles37432.8%Less than 10 miles87633.2% 10 to 24 miles52846.4%10 to 24 miles1,45955.2% 25 to 50 miles17515.4%25 to 50 miles2057.8% Greater than 50 miles625.4%Greater than 50 miles1013.8% Home Destination = Where workers live who are employed in the s election area Work Destination = Where workers are employed who live in the s election area Sources: US Census Bureau Local Employment Dynamics; Maxfield Research & Consulting, LLC CITY OF CORCORAN 2014 Home DestinationWork Destination TABLE 11 COMMUTING PATTERNS HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 50 Nearly 12% of the workers living in Corcoran commute to Minneapolis for employment, while 10% commute to Plymouth and 9% travel to Maple Grove. Roughly 8% of Corcoran’s workforce travels to Medina or Minnetonka and 7% remain in the City. Roughly 33% of resident workers in Corcoran travel less than ten miles for their jobs, while 55% have a commute distance from 10 to 24 miles. Approximately 8% commute between 25 and 50 miles while 4% commute more than 50 miles for employment. Table 12 provides a summary of the inflow and outflow characteristics of the workers in Corco‐ ran. Outflow reflects the number of workers living in the City but employed outside Corcoran, while inflow measures the number of workers that are employed in the City but live outside the City. Interior flow reflects the number of workers that live and work in Corcoran. As the table shows, Corcoran is an exporter of workers as a substantially higher number of resident workers leave the City for employment than nonresidents commute into the City. Roughly 1,039 workers come into the City for employment (inflow) while 2,541 leave (out‐ flow). Approximately 100 people both live and work in Corcoran (interior flow). Roughly 89% of the jobs in Corcoran are filled by workers commuting into the City. A por‐ tion of these workers may be drawn to new housing in the City. Most of the workers com‐ ing into the area are aged 30 to 54 and earn more than $3,333 per month ($40,000 per year). The “All Other Services” sector brings in most of the employees (58%). City of Corcoran, Minnesota2,541100.0%1,039100.0%100100.0% Workers By Age Aged 29 or younger53921.2%21420.6%1616.0% Aged 30 to 541,30451.3%66063.5%5151.0% Aged 55 or older69827.5%16515.9%3333.0% Workers By Monthly Wage Earning $1,250/month or less44617.6%15615.0%3030.0% Earning $1,251 to $3,333/month65925.9%31630.4%2828.0% Earning More than $3,333/month1,43656.5%56754.6%4242.0% Workers By Industry "Goods Producing"58022.8%55553.4%3737.0% "Trade, Transportation, and Utilities"49519.5%21320.5%2727.0% "All Other Services"*1,46657.7%27126.1%3636.0% Sources: US Census Bureau LEHD; Maxfield Research & Consulting, LLC *includes the following sectors: Information, Financial Activities, Professional & Business Services, Education & Health Services, Leisure & Hospitality, Other Servi ces, and Public Administration TABLE 12 COMMUTING INFLOW/OUTFLOW CHARACTERISTICS CITY OF CORCORAN 2014 OutflowInflowInterior Flow HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 51 Summary of Demographic Trends The following summary highlights key demographic trends that will impact housing demand throughout the Housing Market Area. The HMA’s population, which expanded 16.5% between 2000 and 2010, increased by an es‐ timated 9.1% between 2010 and 2016 and is expected to grow 13.0% between 2016 and 2025. The most rapid growth is expected to occur among people age 65 years of age and older. As the baby boom population ages, all cohorts age 55 or greater are expected ex‐ pand in the next several years, particularly the 65 to 74 age group. The age 35 to 44 cohort is also projected to experience moderately strong growth as the peak of the “echo boom” moves into this age group. From 2010 to 2015, the HMA has had 12.9% growth in the number of renter households, while owner‐occupied growth has been much lower (5.3%). The largest overall increase in households occurred in the 35 to 44 age group in the HMA, adding 677 renter households (28%). The 55 to 64 age group added the largest number of owner households, 1,262 own‐ er households or 11.4%. Substantial renter household growth also occurred in the 65 years or older cohort, an increase of 500 households (29.1%). Family households experienced a modest expansion between 2010 and 2015 in the HMA, increasing by 5.0%. There was a 3.4% increase in the number of married couples with chil‐ dren, while the number of married couples without children expanded 15.5% and other family households expanded 3.5%. Non‐family households expanded 5.0%, with the num‐ ber of single‐person households increasing 7.6% against a decrease of ‐5.3% in roommate households. This shift toward “unbundling” is likely a response to the economic recovery after more roommate households were formed during the recession as people attempted to save money on housing costs by living together. Employment growth can fuel household and population growth as people generally desire to live near their work. After enduring a modest decline in employment between 2005 and 2010 due to the recession, the Market Area has experienced solid job growth since 2010. Job growth is projected to continue over the next several years. The pace of job growth is projected to slow after 2020, as the region is expected to experience a surge in retirements and potential labor force shortages. Some labor force shortages are already occurring in some sectors of the economy. Corcoran is an exporter of workers as a higher number of resident workers leave the City for employment than nonresidents commute into the City. However, roughly 89% of the jobs in Corcoran are filled by workers commuting into the City, and a portion of these workers may be drawn to new housing products in Corcoran. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 52 Based on demographic factors influencing the area, notably population and household growth, an aging population, income growth, shifting household types, and job growth, it is our opinion that there will continue to be growing demand for a variety of housing products in the HMA. Residential Construction Trends Based on residential building permit data sourced from the Metropolitan Council, Table 13 pre‐ sents the number of housing units added in Corcoran and the Remainder of the HMA between 2000 and 2016. The data represents the number of units permitted by housing type, including; detached single‐family (SFD) units, townhouse (TH) units, and multifamily (MF) units. Multifam‐ ily includes duplex, triplex, and four‐plex units as well as buildings with five or more units. A total of 19,486 housing units was delivered in the HMA from 2000 through 2016, including 276 in Corcoran and 19,210 in the Remainder of the HMA. Approximately 48% of the per‐ mitted units were for detached single‐family homes (9,287 units) in the remainder of the HMA, while 35% were for multifamily properties (6,660 units) and 17% was for townhouse units (3,263). SFD TH MF Total SFD TH MF Total SFD TH MF Total 20002400249253429912,2589493429912,282 20012900297643468801,9907933468802,019 200224002469627910802,0557202791,0802,079 20031600166163108911,8176323108911,833 20041700174774703721,3194944703721,336 20051800184233473131,0834413473131,101 2006110011470239170879481239170890 200750054261338264143113382646 20087007323100109532330100109539 2009000028436423622843642362 2010400438181244863858124490 201150054326910961043769109615 201220026066312879760863128799 201370077291075801,4167361075801,423 201490096251502441,0196341502441,028 20153900395181133629935571133621,032 201659005959278283953651782831,012 Total276002769,2873,2636,66019,2109,5633,2636,66019,486 SFD = single‐family detached; TH = townhouse; MF = multifamily with 2+ units in a building Sources: Metropolitan Council; Maxfield Research & Consulting, LLC City of CorcoranRemainder of HMATotal TABLE 13 HOUSING MARKET AREA 2000 through 2016 RESIDENTIAL BUILDING PERMIT TRENDS HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 53 On average, the communities comprising the HMA permitted 1,309 units per year from 2000 through 2009 and 896 new units per year since 2010. As illustrated in the following graph, residential construction activity has increased in recent years, but has not reached the pre‐recession levels experienced during the early 2000s. However, Corcoran has exhibited strong growth over the past two years in single‐family de‐ velopment with new construction in Ravinia. Detached single‐family housing has been the most common housing type developed since 2010 in the HMA, representing 48% of all units permitted. Multifamily units represent 35% of all residential construction activity while townhomes comprised 17% of all housing units permitted. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 54 Within the HMA, Maple Grove was the housing growth leader from 2010 through 2016 (8,479 units permitted), followed by Plymouth (6,719 units permitted) and Rogers (2,149 units permitted). Corcoran permitted 121 housing units from 2011 through 2016, all of which were single‐family. Overview of Rental Market Conditions Table 14 displays average monthly rent and vacancy rate data from Marquette Advisors Apart‐ ment Trends report for the Twin Cities Metro Area along with the HMA submarkets adjacent to Corcoran such as Maple Grove and Plymouth. The data is shown for the 4th Quarter of 2015 compared to the 4th Quarter 2016, the most recent data available. The equilibrium vacancy rate for rental housing is considered to be 5.0%. This allows for normal turnover and an adequate supply of alternatives for prospective renters. During the 4th Quarter of 2016, the vacancy rate was 2.7% in the Twin Cities Metro Area and an aver‐ age of 5.7% across the HMA submarkets. In effect, the overall supply of rental housing in the Market Area is below the level considered adequate to meet demand. As illustrated in the following chart, vacancy rates remain below or just below market equi‐ librium across all unit types except two‐bedroom plus den units in the HMA. There was 1.7% vacancy in units with three bedrooms. Two‐bedroom plus den and studio units were 11.1% vacant and 1.6% vacant, respectively. One‐bedroom units had a 4.2% vacancy rate and two‐bedroom units were 4.8% vacant. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 55 Across the Metro Area, vacancies were lowest for three‐bedroom units and units with more than three bedrooms (1.6% and 1.4%, respectively). Studio and one‐bedroom plus den units were 2.2% vacant and 3.1% vacant, respectively. Two‐bedroom plus den units had the highest vacancy rate, at 4.5%, while one‐bedroom and two‐bedroom units were 3.1% and 2.5% vacant, respectively. Within the HMA submarkets, Maple Grove/Osseo/Rogers had a vacancy rate of 8.1%, re‐ flecting new rental product that has come on‐line recently and still in initial lease‐up. Plym‐ outh had a vacancy rate of 3.2%. The vacancy rate in Plymouth was low compared to the market equilibrium rate of 5.0%, indicating that there is demand for additional rental prod‐ uct. Lease‐up of new rental product in the Housing Market Area is expected to accelerate in the spring, as is typical in the Twin Cities rental housing market. Average monthly rents increased by a higher amount between 2014 and 2015, than be‐ tween 2015 and 2016. Between 2015 and 2016, the HMA submarkets experienced increas‐ es in average monthly rents of 2.4% and 1.6%, respectively. At $1,176, the average monthly rent in the HMA is 7.2% higher than the Twin Cities average. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 56 One‐ and two‐bedroom units are the predominant unit types in the HMA, representing 35% and 49% of the inventory, respectively. Three‐bedroom units represent 9% of the invento‐ ry, while 3% of the inventory is comprised of studio units. One‐bedroom plus den and two‐ bedroom plus den units represent 1.3% and 1.9% of the inventory, respectively, and 1.5% of the units have more than three bedrooms. The Metro Area has a slightly lower proportion of two‐bedroom units (42% of the total). Over 44% of the Metro Area’s units have one bedroom, and the Metro Area has a higher proportion of smaller units as over 5% of the units are studios. One‐bedroom plus den units comprise 2.4% of the Metro Area’s supply of apartment units. The Metro Area has smaller proportions of the larger unit types, as 1.2% have two‐bedrooms and a den, 4.9% have three bedrooms, and 0.4% of the units have more than three bedrooms. The following chart illustrates how the general occupancy apartment market recovered af‐ ter struggling with rapidly rising vacancy rates between the fourth quarter of 2007 and the fourth quarter of 2009. Since 2009, apartment rents in the Metro Area have increased at an average rate of roughly 2.5% per year. The tight rental market can be partially attributed to a group of foreclosed homeowners that entered the rental market during the Great Recession and traditional renters, who are potential home‐owners, staying in the rental market longer due to lifestyle preferences. Job growth is also contributing to demand for apartment units, as new people are relocating to the region for employment and moving into rental properties. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 57 According to Marquette Advisors 2,620 apartment units were absorbed in 2016, 3,928 in 2015, 2,767 units in 2014 and 3,378 units in 2013. Absorption in recent years has more than doubled the amount of absorption in 2012 when 1,217 units were absorbed. This in‐ crease in absorption can be attributed, in large part, to a growing inventory of units, as the tight supply constrained absorption in 2012 and 2011. Numerous projects are either under construction or in the development pipeline in the Twin Cities. Maxfield Research is tracking roughly 5,000 units that are under construction or scheduled to move forward. In 2016, 3,138 units were delivered in 2016, compared to 3,322 in 2015 and 4,391 in 2014. Much of the new construction has been located in or near Downtown Minneapolis as 4,030 new units have opened since 2014. In 2017, only 660 units are expected to be delivered in Downtown Minneapolis with 2017 and 2018 ramping up again and projected to deliver 2,000 and 2,500 units, respectively. New market rate rental construction continues to make its way into suburban locations, and two new projects are currently under construction in the HMA, in Maple Grove and Rogers. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 58 Selected Market Rate Apartment Developments Maxfield Research compiled detailed information for a select group of the newest market rate apartment properties in the HMA that would compete either directly or indirectly with general occupancy apartment units in Corcoran. Data on these competitive properties is presented in Tables 15 and 16 on the following pages. The rents shown represent quoted rental rates and have not been adjusted to reflect the inclu‐ sion or exclusion of utilities. Most new rental properties (post 2000) require the tenant to pay most, if not all, of the utilities. 1 BR2 BR3 BR/DAverage TotalStudio1 BRw/ Den2 BRw/ Den3 BRor 4BR Increase Units 1,960 ‐‐‐6874995241231‐‐‐‐‐ No. Vacant 56 ‐‐‐1633034‐‐‐‐‐ Avg. Rent $1,251 ‐‐‐$1,094$1,367$1,291$1,672$1,477‐‐‐10.2% Vacancy 2.9%‐‐‐2.3%6.1%3.2%7.3%1.7%‐‐‐0.6% Units 2,132 ‐‐‐749331,08071199‐‐‐‐‐ No. Vacant 173 ‐‐‐55295201‐‐‐‐‐ Avg. Rent $1,314 ‐‐‐$1,131$1,556$1,357$1,930$1,537‐‐‐5.0% Vacancy 8.1%‐‐‐7.3%6.1%8.8%28.2%0.5%‐‐‐5.3% Units 5,661 1161,8522183,016121338‐‐‐‐‐ No. Vacant 189 453412152‐‐‐‐‐ Avg. Rent $1,127 $831$960$1,124$1,184$1,426$1,523‐‐‐3.1% Vacancy 3.3%3.4%2.9%1.8%4.0%4.1%0.6%‐‐‐‐0.5% Units 5,598 1281,9182182,868128338‐‐‐‐‐ No. Vacant 170 25849628‐‐‐‐‐ Avg. Rent $1,166 $857$1,000$1,136$1,234$1,475$1,541‐‐‐3.4% Vacancy 3.0%1.6%3.0%1.8%3.3%1.6%2.4%‐‐‐‐0.3% Units 129,029 6,56456,9542,99854,0341,5526,513414‐‐ No. Vacant 2,947 1221,264701,3104612510‐‐ Avg. Rent $1,053 $818$926$1,302$1,132$1,742$1,382$1,8243.1% Vacancy 2.3%1.9%2.2%2.3%2.4%3.0%1.9%2.4%‐0.6% Units 133,265 6,97859,1503,22155,4911,6166,442367‐‐ No. Vacant 3,652 1511,8281011,394731005‐‐ Avg. Rent $1,095 $869$967$1,352$1,177$1,921$1,419$2,2404.0% Vacancy 2.7%2.2%3.1%3.1%2.5%4.5%1.6%1.4%0.5% Sources: GVA Marquette Advisors; Maxfield Research & Consulting, LLC Q4 / 2 0 1 6 Q4 / 2 0 1 6 Q 4 / 2 0 1 5 Q4 / 2 0 1 6 Q4 / 2 0 1 5 TWIN CITIES METRO AREA MAPLE GROVE/OSSEO/ROGERS PLYMOUTH TABLE 14 AVERAGE RENTS/VACANCIES TRENDS CORCORAN MARKET AREA Fourth Quarter 2015 to Fourth Quarter 2016 Q4 / 2 0 1 5 HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 59 Occp.No. ofTotal Project Name/LocationDateUnitsVacantTypeNo.Vac.MinMaxMinMax Village at Arbor Lakes 2018261n/aStudio7n/a622‐622$1,250‐$1,295$2.01‐$2.08 Elm Creek Blvd./Hemlockvacancy rate:n/a1BR134n/a722‐783$1,450‐$1,550$1.98‐$2.01 Maple Grove, MN 2BR102n/a1,108‐1,208$1,950‐$2,300$1.76‐$1.90 3BR18n/a1,444‐1,566$2,550‐$2,800$1.77‐$1.79 (Under Construction‐Not Preleasing ‐ Excluded from Calculations Notes: Just Off Main 199912501BR150784‐784$1,165‐$1,165$1.49‐$1.49 12911 Arbor Lake Pkwy.vacancy rate:0.0%2BR8011,019‐1,196$1,375‐$1,565$1.31‐$1.35 Maple Grove, MN 3BR3011,404‐1,404$1,765‐$1,765$1.26‐$1.26 Notes: Arbor Glen 200726401BR520811‐852$1,200‐$1,260$1.48‐$1.48 9325 Garland Lane N.vacancy rate:0.0%2BR1700970‐1,221$1,265‐$1,425$1.17‐$1.30 Maple Grove, MN 3BR4201,307‐1,469$1,575‐$1,655$1.13‐$1.21 Notes: 5 Central 201514471BR703768‐787$1,350‐$1,450$1.76‐$1.84 20 6th Street NWvacancy rate:4.9%1BR+D252950‐956$1,545‐$1,596$1.63‐$1.67 Osseo, MN 2BR4991,051‐1,185$1,620‐$1,900$1.54‐$1.60 Notes: Stoneleigh at the Reserve 20033616Studio211530‐530$1,010‐$1,595$1.91‐$3.01 5200‐5300 Anapolis Ln., N.vacancy rate:1.7%1BR2003720‐1,036$1,225‐$1,925$1.70‐$1.86 Plymouth, MN 1BR+D2901,016‐1,046$1,440‐$2,050$1.42‐$1.96 2BR11121,092‐1,376$1,560‐$2,450$1.43‐$1.78 Notes: Quinn at Plymouth 200329761BR1125677‐800$1,156‐$1,261$1.58‐$1.71 6110 Quinwood Ln. N.vacancy rate:2.0%1BR+D360990‐990$1,114‐$1,249$1.13‐$1.26 Plymouth, MN 2BR12541,008‐1,187$1,129‐$1,633$1.12‐$1.38 3BR2411,417‐1,417$1,880‐$1,855$1.31‐$1.33 Notes: Vicksburg Village 199033471BR1041785‐822$1,243‐$1,450$1.58‐$1.76 15730 Rockford Roadvacancy rate:2.1%2BR198111,042‐1,248$1,631‐$1,977$1.57‐$1.58 Plymouth, MN 3BR3221,386‐1,521$1,599‐$1,952$1.15‐$1.28 Notes: Stabilized Properties Units feature full‐size W/D, 9' ceilings, granite countertops, SS appliances, balconies, and kitchen islands. Amenities include outdoor pool, fitness center, heated UG parking, business center, and controlled access. Full kitchen appliance package including in‐unit W/D, central air, and some fireplaces. Amenities include UG heated parking, fitness center, spa, outdoor pool, movie theater, playground, business center dog park, and community room. Utilities are tenant‐paid. Units include wood floors, kitchen islands, walk‐in closets, extra storage, and in‐unit washer/dryer. Community featuers include a clubhouse, fitness center, billiards room, heated parking, and detached garages. Currently offering one month rent free w/12 mo. lease. Features include underground heated parking, elevator, secure building, central AC, fitness center, business center, lounge; units include granite counters, stainless appliances, full kitchen appliance package, in‐unit washer/dryer and balcony. ‐‐‐‐‐ continued ‐‐‐‐‐ Units feature in‐unit W/D, center islands, granite countertops, and some fireplaces. Amenities include fitness center, outdoor fire pit with grilling area, heated UG parking, business center, community room, free Wi‐Fi in common areas, dog park, and courtyard. TABLE 15 SELECT NEW MARKET RATE RENTAL PROJECTS HOUSING MARKET AREA March 2017 Units include central air, wood and gas fireplaces, full kitchen appliance package, balconies/patios, in‐ unit W/D, walk‐in closets, and vaulted ceilings in select homes. Amenities include indoor and outdoor pools, business center, game room, dog park, yoga studio, Spanish‐speaking staff, UG parking, and club house. Monthly Rent Size Unit DescriptionRent/sq. ft. Brick exteriors, private entries, Cat 5 cabling, in‐unit washer/dryer, skylights, walk‐in closets, loft layouts, AG parking, deck, full kitchen appliance package, vaulted ceilings, intrusion alarms, bay windows. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 60 Occp.No. ofTotal Project Name/LocationDateUnitsVacantTypeNo.Vac.MinMaxMinMax Creekside Apartments 200020421BR450740‐853$1,050‐$1,125$1.32‐$1.42 250 Nathan Ln. N.vacancy rate:1.0%1BR+D421861‐1,083$1,275‐$1,486$1.37‐$1.48 Plymouth, MN 2BR11711,073‐1,132$1,440‐$1,596$1.34‐$1.41 Notes: Shadow Hills 2016322111BR1370830‐960$1,156‐$1,326$1.38‐$1.39 4540 Nathan Lane N.vacancy rate:3.4%2BR18201,020‐1,477$1,370‐$1,629$1.10‐$1.34 Plymouth, MN 3BR301,525‐1,525$1,695‐$1,725$1.11‐$1.13 Notes: 610 West 2016480296Studio3722641‐702$1,100‐$1,325$1.72‐$1.89 15300 37th Avenue N.vacancy rate:61.7%1BR246168734‐816$1,150‐$1,750$1.57‐$2.14 Brookkyn Park, MN (Outside PMA)1BR+D108922‐979$1,520‐$1,650$1.65‐$1.69 Initial Lease‐up Period2BR1601281,166‐1,578$1,880‐$2,550$1.61‐$1.62 3BR2791,540‐1,615$2,275‐$2,450$1.48‐$1.52 Notes: The Axis 2016164431BR9175230‐728$1,265‐$1,615$2.22‐$5.50 350 Nathan Lane N.vacancy rate:26.2%2BR73711,130‐1,292$1,870‐$2,395$1.65‐$1.85 Plymouth, MN Notes: Skye at Arbor Lakes 2015471871BR2165856‐1,083$1,417‐$1,514$1.40‐$1.66 12911 Arbor Lakes Pkwy.vacancy rate:18.5%1BR+D6601,024‐1,184$1,518‐$1,752$1.48‐$1.48 Maple Grove, MN 2BR16141,179‐1,460$1,743‐$1,996$1.37‐$1.48 In Initial Lease‐up‐Phase II 2BR+D2801,570‐1,570$2,172‐$2,197$1.38‐$1.40 Notes: Island Residences at Carlson 201517491BR10213710‐845$1,325‐$2,025$1.87‐$2.40 501 Carlson Parkwayvacancy rate:5.2%2BR6371,124‐1,221$2,255‐$2,695$2.01‐$2.21 Minnetonka, MN (outside PMA)3BR901,457‐1,457$3,135‐$3,210$2.15‐$2.20 Notes: Total3,34047414.2% Stabilized Total2,051391.9% Source: Maxfield Research & Consulting, LLC Projects in Initial Lease‐Up Size Rent/sq. ft. HOUSING MARKET AREA 62 1BR and 29 2BR open. 18 1BR preleased. Amenities include clubhouse with coffee bar, Wi‐Fi, and fireplace, swimming pool, fitness facility, complimentary car wash area, pet playgrounds. Units include attached and detached garages, SS or black appliances, walk‐in closets, in‐unit W/D, and granite countertops. Building constructed on an island; in‐unit features include stainless appliances, entertainment islands, 42" upper cabinets, quartz countertops, walk‐in closets, 9 ft. ceilings, pantries in most units, in‐unit w/d, keyless locks, programmable thermostats, tile flooring in master bath, designer roller shades, LED lighting. Common amenities include scenic walking paths, sauna and private spa room, poolside outdoor kitchen, outdoor terrace w/lap pool, guest suite, fitness center, bike storage, pet friendly areas and pet spa, underground parking, clubroom and firepit. Currently leasing West units; East units at stabilized occupancy. Units include SS appliances, kitchen islands, granite countertops, full‐size W/D, 9' ceilings, balconies, and walk‐in closets. Amenities include pub room with fireplace, patio with fire pit, yoga studio, fitness center, swimming pool, hot tub, private theater, Wi‐Fi lounge, dog washing station, concierge, business center, conference room, car wash bay, and grills. 3‐story buildings. Units feature oversized closets, in‐unit washer/dryer, full kitchen appliance package. Amenities include elevator, extra storage, fitness center, playground, swimming pool, and garage parking. Water and trash removal included in rent. In‐unit features include high ceilings, balconies, over‐sized windows, high‐speed Internet; french doors to balcony; common laundry each floor; amenities include commun ity room with fireplace, underground parking, fitness center, business center, storage lockers, in‐unit washer/dryer, full kitchen appliance package. March 2017 Unit DescriptionMonthly Rent TABLE 15 continued SELECT NEW MARKET RATE RENTAL PROJECTS Fully renovated buildings and clubhouse. Amenities include rooftop lounge and patio, fitness center, free ramp parking, heated UG parking ($150/mo.), package receiving, and free internet. Units feature keyless entry, walk‐in closets, in‐unit W/D, SS appliances, and granite countertops. Electric, water, sewer, and trash removal included in rent. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 61 The per square foot average rents presented reflect a weighted average based on the number of units in each development. Therefore, developments with a larger number of units of any one type contribute more toward the average than those with only a few units of a specific type. Table 16 and the points that follow summarize key observations for the selected general occupancy market rate rental developments. A total of 3,077 units is represented among 12 market rate rental properties. Ten of the 12 are located in the HMA and two are located outside of the HMA in the adjacent communi‐ ties of Brooklyn Park and Minnetonka. Roughly 46% of the units in the competitive set have two bedrooms and 42% have one bed‐ room. Three‐bedroom units represent 5.4% of the inventory. One‐bedroom plus den and two‐bedroom plus den units represent 5.3% and 0.4% of the inventory, respectively, while 1.9% of the inventory is comprised of studio units. Units in the market rate properties have an average of 1,103 square feet, with studio units the smallest at 695 square feet. Three‐bedroom units have the largest square footage at 1,607 square feet. Monthly rental rates range from a low of $1,010 for studio units at Stoneleigh at the Re‐ serve to a high of $3,210 for a three‐bedroom unit at Island Residences at Carlson Center, one of the newest rental properties in the area. Monthly rents average $1,399 for studio units, $1,566 for one‐bedroom units, $1,477 for one‐bedroom plus den units, $1,895 for two‐bedroom units, $2,185 for two‐bedroom plus den units, and $2,204 for units with three bedrooms. Total% ofAvg. Avg. Avg. Rent/ Unit TypeUnitsTotalSizeLow‐HighRentSq. Ft. Studio581.9%695$1,010‐$1,585$1,399$2.29 1BR1,27841.5%880$1,050‐$2,025$1,566$2.01 1BR+Den1645.3%1,000$1,114‐$2,050$1,477$1.48 2BR1,39845.4%1,273$1,129‐$2,695$1,895$1.59 2BR+Den120.4%1,570$2,172‐$2,197$2,185$1.39 3BR1675.4%1,607$1,560‐$3,210$2,204$1.51 Total:3,077100%1,103$1,010‐$3,210$1,744$1.77 Source: Maxfield Research & Consulting, LLC Range TABLE 16 UNIT TYPE SUMMARY SELECTED MARKET RATE RENTAL DEVELOPMENTS March 2017 Monthly Rents HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 62 The weighted average monthly rent at these market rate projects is $1,744 which equates to $1.77 per square foot. Per square foot rents for these properties range from a low of $1.16 per square foot at Shadow Hills in Plymouth to $2.13 at Island Residences at Carlson Center in Minnetonka. The following list identifies the average per square foot rent for these properties along with their City and year built: – 610 West (2016) Brooklyn Park $1.67 per square foot – Skye at Arbor Lakes (2015) Maple Grove $1.47 per square foot – Arbor Glen (2015) Maple Grove $1.27 per square foot – 5 Central (2015) Osseo $1.70 per square foot – Quinn at Plymouth (2015) Plymouth $1.40 per square foot – Just Off Main (2007) Maple Grove $1.33 per square foot – Stoneleigh at the Reserve (2009) Plymouth $1.77 per square foot – The Axis (2016) Plymouth $2.45 per square foot – Vicksburg Village (2003) Plymouth $1.57 per square foot – Creekside (2004) Plymouth $1.38 per square foot – Shadow Hills (2003) Plymouth $1.28 per square foot – Island Residences (2016) Minnetonka $2.14 per square foot The vacancy analysis includes a total of eight properties with 994 units as the remaining properties are still in their initial lease‐up periods. These eight properties contain a total of 39 vacant units, representing a 3.9% vacancy rate, still below the market equilibrium rate of 5.0%. This indicates that the supply of rental housing in and near the HMA is modestly be‐ low the level needed to adequately meet demand. Additional units currently leasing and units that are planned in the HMA will fill a portion of the potential demand for rental hous‐ ing. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 63 The properties in initial lease‐up (610 West, The Axis, Skye at Arbor Lakes‐Phase II and Is‐ land Residences at Carlson Center) seem to have higher proportions of two‐ and three‐ bedroom units remaining to be leased. Studio and one‐bedroom units are absorbing more rapidly at each property. The newest properties are offering residents contemporary features and amenities such as: – Nine foot ceilings, walk‐in closets, in‐unit laundry, patios, porches, or balconies; – Full kitchen appliance package with stainless appliances, granite countertops and kitch‐ en islands in larger size units; – Fitness center, outdoor living/entertainment options, swimming pool, community room; – Secure keyless entry, private theater, concierge, and package receiving services; – Underground/covered parking and free Wi‐Fi in common areas. Projects Ce n t r a l A C Di s h w a s h e r Pa t i o / B a l c o n y Wa l k ‐ i n C l o s e t La u n d r y Co n c i e r g e Co m m u n i t y R m . Fi t n e s s C e n t e r Pl a y g r o u n d Po o l St o r a g e He a t / G a s El e c t r i c i t y Wa t e r / S e w e r Tr a s h Ca b l e Pa r k i n g Village at Arbor Lakes XXXXIUXXXXXXUG Just Off Main XXXXIUXXXAG Arbor Glen XXXXIUXXXXXXXUG 5 Central XXXXIUXXUG Stoneleigh at the Reserve XXXXIUXXXXUG Quinn at Plymouth XXXXIUXXXXAG Vicksburg Village XXXXIUXXXXUG Creekside Apartments XXXXIUXXXXXXUG Shadow Hills XXXXIUXXXXXXUG 610 West XXXXIUXXUG The Axis XXXXIUXXXXUG Skye at Arbor Lakes XXXXIUXXAG Island Residences at Carlson XXXXIUXXXXXUG Notes: X=Available/Included; DG=Detached Garage; UG=Underground; AG=Attached Garage; IU=In‐unit TABLE 17 UNIT FEATURES AND COMMON AREA AMENITIES SELECTED MARKET RATE RENTAL PROJECTS March 2017 In Unit/Common Area Amenities Utilities and Parking Source: Maxfield Research & Consulting, LLC HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 64 Pending Rental Developments Maxfield Research interviewed planning and community development staff in the Market Area to identify any new rental developments that are proposed, planned or under construction in the HMA and may have an impact on any new market rate rental properties that would be de‐ veloped in Corcoran. Table 18 lists pending general occupancy apartment developments in the HMA with their locations, number of units, and name of developer, if known. Maxfield Research identified two general occupancy rental developments in the HMA in various stages of development, containing a total of 417 units. There is one project under construction that will be developed in phases. Village at Arbor Lakes is being developed by Doran Companies. Phase I consists of 261 units including al‐ cove, one‐bedroom, two‐bedroom and three‐bedroom units. The first building is scheduled to open in spring 2018. The estimated average rent per square foot is $1.90. One other property, Vincent Woods, totaling 156 units is under construction in the City of Rogers. The two properties are incorporated into our demand calculations presented later in this report. Apartment development activity continues to be quite active in the Twin Cities, with nu‐ merous projects under construction or in the development pipeline. Although the majority of the new rental properties that have recently come on‐line are located in or near Down‐ town Minneapolis, but development is expanding outward to first‐ and second‐tier subur‐ ban locations near areas of high employment. While recently opened suburban rentals have experienced strong absorption, the number of market rate units proposed in the HMA at this time is limited. The ability to support ad‐ ditional new rental units in the market depends on the following factors including: pro‐ spects continuing to prefer rentals over ownership; continuing job growth; the limited sup‐ ply of moderately priced ownership housing, the very high price of new construction single‐ family homes and some ongoing skepticism about the long‐term appreciation of for‐sale housing. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 65 Market Rate General Occupancy Rental Demand Calculations Table 19 presents our calculation of general occupancy market rate rental housing demand for the HMA and assesses the potential for Corcoran to capture a portion of demand. Factors con‐ sidered include competitiveness of area rental properties, pending developments, demographic trends, and population shifts. Potential demand is calculated from two categories: 1. From new household growth by age group based on the propensity of households to rent their housing in the Housing Market Area; and, 2. From existing households that will remain in the Market Area because new product is available and they value other area amenities including proximity to employment, en‐ tertainment and recreation. First, we calculate potential demand from new income‐qualified household growth over the next five years by age group based on the propensity of households to rent their housing. We focus on households between the ages of 18 and 64 that will account for the vast majority of rental demand. We also include a portion (20%) of the demand generated by households age 65 and older, as a segment of this age group that is able to live independently could be drawn to a new general occupancy rental housing development in Corcoran. The propensity to rent or own is based on 2014 American Community Survey figures by age cohort updated for 2016. Next, we calculate the percentage of renters who are income‐qualified for market rate rental housing. For new market rate housing, household incomes must equal or exceed approximate‐ ly $52,000 in order to afford a one‐bedroom unit. Project NameTotal LocationCityUnitsDeveloper/ApplicantStatus/Notes Village at Arbor LakesMaple Grove261Doran CompaniesApproved; Phase I scheduled Elm Creek Blvd./Hemlock Laneto break ground Spr. 2017 Vincent WoodsRogers156Vincent AssetApproved; under construction Hwy 81/Marion CourtManagementSix buildings total Under Construction Subtotal:156 Approved Subtotal:261 Proposed Subtotal: Pending Total:417 Source: Maxfield Research & Consulting, LLC TABLE 18 PENDING GENERAL OCCUPANCY RENTAL DEVELOPMENTS HOUSING MARKET AREA March 2017 HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 66 The second part of the analysis calculates demand from existing households, or turnover de‐ mand. Younger households tend to be highly mobile, relative to older households. The young‐ est households are often unable to afford rents at the top of the market unless they receive as‐ sistance from their parents or desire a roommate. Mobility rates were identified by age group (utilizing Census data) and were applied to the existing household base. Together with demand from projected household growth and turnover, the total demand for HMA market rate rental housing is summarized. In the HMA, total demand for income‐ qualified market rate housing over the next five years is 2,674 units. An additional proportion is added for households that would move to a rental project in the HMA who currently reside outside the HMA. We estimate that 20% of the demand potential for market rate rental housing in the HMA would be derived from outside the HMA, increasing demand to 3,342 units. From the demand potential, we subtract pending rental developments in the HMA at market equilibrium (95% occupancy) to find the remaining excess demand. We identified two market rate projects totaling 417 units that have already started or are expected to start construction in the near term. Excess demand was calculated at 2,266 units of market rate rental housing in the HMA between 2016 and 2021. We estimate that a development in Corcoran could capture an estimated 10% of the total de‐ mand in the HMA. This capture rate considers Corcoran’s potential draw from the HMA and al‐ so accounts for the number and location of other developments that would satisfy demand. We anticipate that Corcoran could support 113 new general occupancy market rate rental housing units between 2016 and 2021. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 67 Age <25 Age 25 to 34 Age 35 to 44 Age 45 to 64 Age 65 & Over Demand From Household Growth Projected Income‐Qualifed Household Growth 2016 ‐ 20211 911,1588482,0873,623 (times) Proportion estimated to be renting their housing2 x80%45%22%11%16% (equals) Demand For Rental Housing, 2016 ‐ 2021=73521187232580 Demand From Existing Households Estimated number of renter households in 20161,1294,0533,2733,1252,089 (times) Estimated % Turnover between 2016 & 2021x82%82%60%60%50% (equals) Total Existing Households Projected to Turnover=9283,3321,9571,8691,047 (times) Percent of Households Income Qualified2 x54%75%78%86%59% (equals) Total Number of Income‐Qualified Households=5012,4991,5271,607617 (times) Estimated % Desiring New Rental Housing3 x16%16%16%16%16% (equals) Demand From Existing Households=8040024425799 Total Demand From Household Growth and Existing Households153921431489678 Demand Summary Total Market Area Demand for Rental Housing in PMA= (plus) Demand from outside PMA (20%)+ (equals) Potential demand for rental housing in the PMA (2016 to 2021)= (minus) Pending rental units in the PMA at equilibrium‐ (equals) Excess demand for rental housing in the PMA (2016 to 2021)= (times) Percent capturable in Corcoran5% (equals) Total Demand Capturable in Corcoran (units)=113 1 $52,000 in 2016 based on average pricing of one‐bedroom apartments in the competitive set. 2 Data from U.S. Census Bureau. 3 Source ‐ The Upscale Apartment Market: Trends and Prospects . Prepared by Jack Goodman of Hartrey Advisors for the National Multi Housing Council. Source: Maxfield Research & Consulting, LLC 2,266 2,129 532 2,662 396 TABLE 19 PROJECTED DEMAND FOR MARKET RATE RENTAL HOUSING HOUSING MARKET AREA 2016 to 2021 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Number of Households ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 68 Home Sales Table 20 on the following page presents home resale data from 2009 through 2016 for the HMA compared to the Twin Cities Metro Area. The table displays the median sale price, num‐ ber of closed transactions, median size, median year built, and marketing time (average days on market) for all detached single‐family residential resales (excludes new construction) compared to multifamily residential resales which include townhomes, twin homes, and condominiums. This data was obtained from the Greater Minneapolis Area Association of Realtors. After peaking at just over $244,000 in 2006, the median sale price for single‐family homes in the Twin Cities Metro Area declined sharply over the next five years, falling to $161,000 in 2011 (‐34%). Since 2011 however, the median sale price has posted strong gains as the number of lender‐mediated properties on the market has declined and demand has in‐ creased, climbing to $251,000 as of the end of 2016. Similarly, multifamily pricing dropped from a median of $179,000 in 2006 to $110,000 in 2011 (‐39%), before climbing to $172,500 in 2016. In the Metro Area, multifamily sales activity accelerated from 7,876 transactions in 2010 to 11,123 sales in 2013, a 41% increase. Sales volume declined slightly (‐0.6%) to 11,056 transactions in 2014 before jumping 12.7% to 12,455 sales in 2015 and to 14,494 sales in 2016. Single‐family sales in the Metro Area also increased 41% between 2010 and 2013 in the Metro Area. Single‐family sales activity dropped ‐8.5% to 34,020 sales in 2014, but climbed 15.8% to 44,880 sales in 2016. Sales activity experienced a similar trend in the HMA. Single‐family sales climbed steadily from 2010 through 2012, before slipping ‐6.5% in 2012, then gradually increasing again from 2012 through 2016. Multifamily sales activity in the HMA increased from 2012 through 2016 by 53.2%. HO U S I N G M A R K E T A N A L Y S I S MA X F I E L D R E S E A R C H A N D C O N S U L T I N G , L L C 69 Me d i a n Sa l e P r i c e % Ch a n g e Cl o s e d Sa l e s % Ch a n g e Me d i a n Si z e ( S F ) Me d i a n Pr i c e / S F Me d i a n Yr . B l t . Av g . D a y s on M a r k e t Me d i a n Sa l e P r i c e % Ch a n g e Cl o s e d Sa l e s % Ch a n g e Median Price/SFAvg. Days on Market Si n g l e ‐ f a m i l y 20 1 6 $ 3 3 6 , 0 0 0 2 4 . 4 % 2 , 5 7 1 ‐ ‐ 2 , 1 3 0 $ 1 5 8 1 9 8 7 3 1 $ 2 5 1 , 0 0 0 9 . 1 % 4 4 , 8 8 0 ‐ ‐ $ 1 2 6 68 20 1 5 $ 2 7 0 , 0 0 0 3 . 8 % 1 , 9 9 5 2 5 . 1 % 2 , 1 6 8 $ 1 2 5 1 9 9 0 3 4 $ 2 3 0 , 0 0 0 6 . 0 % 3 9 , 3 8 3 1 5 . 8 %$11781 20 1 4 $ 2 6 0 , 0 0 0 4 . 7 % 1 , 5 9 5 ‐ 1 0 . 4 % 2 , 1 0 3 $ 1 2 4 1 9 9 0 3 7 $ 2 1 7 , 0 0 0 6 . 4 % 3 4 , 0 2 0 ‐ 8 . 5%$11282 20 1 3 $ 2 4 8 , 2 5 0 7 . 9 % 1 , 7 8 0 ‐ 2 1 . 8 % 2 , 1 5 6 $ 1 1 5 1 9 9 0 3 3 $ 2 0 4 , 0 0 0 1 4 . 7 % 3 7 , 1 9 2 8 . 2%$10685 20 1 2 $ 2 3 0 , 0 0 0 9 . 5 % 2 , 2 7 7 8 8 . 0 % 2 , 1 5 7 $ 1 0 7 1 9 8 9 4 3 $ 1 7 7 , 9 0 0 1 0 . 5 % 3 4 , 3 8 5 1 8 . 4%$94114 20 1 1 $ 2 1 0 , 0 0 0 ‐ 1 0 . 3 % 1 , 2 1 1 8 . 7 % 2 , 0 6 6 $ 1 0 2 1 9 9 0 6 2 $ 1 6 1 , 0 0 0 ‐ 1 0 . 5 % 2 9 , 0 4 5 1 0. 1 % $ 8 7 1 4 3 20 1 0 $ 2 3 4 , 1 5 0 2 . 7 % 1 , 1 1 4 ‐ 7 . 6 % 2 , 1 3 3 $ 1 1 0 1 9 9 0 5 6 $ 1 7 9 , 9 0 0 3 . 2 % 2 6 , 3 7 3 ‐ 1 8 . 7%$97128 20 0 9 $ 2 2 8 , 0 0 0 ‐ ‐ 1 , 2 0 6 ‐ ‐ 2 , 0 2 1 $ 1 1 3 1 9 9 0 5 5 $ 1 7 4 , 4 0 0 ‐ ‐ 3 2 , 4 2 0 ‐ ‐ $ 9 7 1 3 6 Mu l t i f a m i l y 20 1 6 $ 1 8 8 , 9 5 0 5 . 7 % 1 , 1 8 4 ‐ ‐ 1 , 5 8 0 $ 1 2 0 1 9 9 9 2 7 $ 1 7 2 , 5 0 0 6 . 8 % 1 4 , 4 9 4 ‐ ‐ $ 1 1 7 5 6 20 1 5 $ 1 7 8 , 8 0 0 5 . 2 % 1 , 0 0 9 8 . 8 % 1 , 5 9 2 $ 1 1 2 1 9 9 8 3 0 $ 1 6 1 , 5 0 0 4 . 3 % 1 2 , 4 5 5 1 2 . 7 % $10964 20 1 4 $ 1 6 9 , 9 0 0 5 . 8 % 9 2 7 ‐ 0 . 7 % 1 , 5 7 4 $ 1 0 8 1 9 9 8 3 5 $ 1 5 4 , 9 0 0 9 . 1 % 1 1 , 0 5 6 ‐ 0 . 6 % $ 10571 20 1 3 $ 1 6 0 , 5 5 0 1 4 . 8 % 9 3 4 2 0 . 8 % 1 , 5 9 4 $ 1 0 1 1 9 9 8 3 1 $ 1 4 2 , 0 0 0 1 8 . 3 % 1 1 , 1 2 3 9 . 3 % $9779 20 1 2 $ 1 3 9 , 9 0 0 0 . 3 % 7 7 3 ‐ 3 . 5 % 1 , 5 5 0 $ 9 0 1 9 9 7 4 4 $ 1 2 0 , 0 0 0 9 . 1 % 1 0 , 1 7 4 1 2 . 0 % $ 8 3126 20 1 1 $ 1 3 9 , 5 0 0 ‐ 9 . 7 % 8 0 1 3 8 . 1 % 1 , 5 8 0 $ 8 8 1 9 9 3 6 3 $ 1 1 0 , 0 0 0 ‐ 1 4 . 7 % 9 , 0 8 5 1 5 . 4 % $75161 20 1 0 $ 1 5 4 , 4 3 0 ‐ 2 . 9 % 5 8 0 ‐ 1 3 . 9 % 1 , 5 5 3 $ 9 9 1 9 9 8 6 5 $ 1 2 8 , 9 0 0 ‐ 2 . 3 % 7 , 8 7 6 ‐ 1 1 . 8 %$89150 20 0 9 $ 1 5 9 , 0 0 0 ‐ ‐ 6 7 4 ‐ ‐ 1 , 5 0 0 $ 1 0 6 1 9 9 7 6 4 $ 1 3 2 , 0 0 0 ‐ ‐ 8 , 9 2 6 ‐ ‐ $ 9 4 1 6 6 So u r c e s : G r e a t e r M i n n e a p o l i s A r e a A s s o c i a t i o n o f R e a l t o r s ; M a x fi e l d R e s e a r c h & C o n s u l t i n g , L L C TA B L E 2 0 RE S I D E N T I A L R E S A L E S A C T I V I T Y CO R C O R A N H O U S I N G M A R K E T A R E A 20 0 9 t h r o u g h 2 0 1 6 Ho u s i n g M a r k e t A r e a T w i n C i t i e s M e t r o A r e a HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 70 The median sale price for single‐family homes in the HMA is $336,000, 33.9% higher than the Metro Area ($251,000). The multifamily median sale price in the HMA ($188,950) is ‐ 9.5% higher than the Metro Area median ($172,500). Median sale prices having been climbing steadily in the HMA since dropping to lows of $199,250 for single‐family homes and $105,000 for multifamily units in 2011. Since 2011, the median sale price for single‐family homes has increased by 32% to $336,000 through 2016, while multifamily pricing increased by 34.1% to $188,950. The HMA appears to have a relatively active owned multifamily residential market, as 32% of all closed resales from 2009 through 2016 were multifamily homes. By comparison, mul‐ tifamily transactions represented 24% of all closed sales in the Metro Area. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 71 As depicted in Table 21, single‐family homes priced between $200,000 and $299,999 have had the highest number of resales in the HMA since 2014, representing 35% of all single‐ family sales, while homes sold in the $300,000 to $399,999 price range represent 29% of all sales. Single‐family homes priced between $100,000 and $199,999 and between $400,000 and $499,999 represented 4% and 15% of all single‐family sales, respectively. Homes priced at $500,000 represented 16.8% of all transactions and homes priced below $100,000 repre‐ sented 0.2% of all sales. Of the multifamily units sold in the HMA since 2014, 58% were priced in the $100,000 to $199,999 range and 28% were priced between $200,000 to $299,999. Eight percent of the multifamily units were priced between $300,000 and $399,999, and 2.8% were priced at $400,000 or higher. The remaining 3.1% of the sales were for units priced less than $100,000. Closed Sales % of Total Closed Sales % of Total Closed Sales % of Total Closed Sales % of Total Single‐family Less than $100,00020.1%100.5%40.2%160.3% $100,000 to $199,9991459.1%1095.6%713.5%3255.8% $200,000 to $299,99956935.7%71736.7%71935.4%2,00535.9% $300,000 to $399,99940825.6%55228.2%58628.9%1,54627.7% $400,000 to $499,99922914.4%29415.0%30915.2%83214.9% $500,000 to $599,9991106.9%1447.4%1748.6%4287.7% $600,000 or more1328.3%1296.6%1678.2%4287.7% Total1,595100%1,955100%2,030100%5,580100% Multifamily Less than $100,000374.0%363.6%231.9%963.1% $100,000 to $200,00056260.7%59559.0%65355.2%1,81058.0% $200,000 to $299,99923725.6%27227.0%36831.1%87728.1% $300,000 to $399,999616.6%807.9%1058.9%2467.9% $400,000 to $499,999252.7%181.8%231.9%662.1% $500,000 to $599,99930.3%70.7%100.8%200.6% $600,000 or more10.1%10.1%20.2%40.1% Total926100%1,009100%1,184100%3,119100% Sources: Greater Minneapolis Area Association of Realtors; Maxfield Research & Consulting, LLC TABLE 21 RESIDENTAL RESALES ACTIVITY ‐ PRICE DISTRIBUTION HOUSING MARKET AREA 201420152016Total HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 72 Active Listings Table 22 presents a summary of detached single‐family and multifamily homes currently listed for sale in the HMA. Multifamily includes condominiums, townhouses, twin homes, and patio homes. There were only 190 homes listed for sale in the HMA as of March 2017. An estimated 92% of the for‐sale listings (174 homes) are single‐family units and the remaining 8.4% (16 homes) are owned multifamily units. The median asking price for single‐family homes in the HMA is $602,500, which is 79% high‐ er than the median price of closed sales year‐to‐date in 2016 ($336,000). The median ask‐ ing price for multifamily units at $286,400, is 52% higher than the median price of closed multifamily sales in 2016 ($188,950). The higher asking prices reflect higher‐priced homes listed for sale that may remain on the market for longer periods of time. In addition, the in‐ ventory of owned multifamily homes has dropped considerably. Listings % of Total Median Year Built Median Size Median Price Price per Sq. Ft. Single‐family Detached Less than $100,00010.5%19001,750$70,000$40.00 $100,000 to $199,99963.2%19541,812$147,450$81.37 $200,000 to $299,999136.8%19692,047$289,000$141.18 $300,000 to $399,9992412.6%19832,444$349,950$143.19 $400,000 to $499,9992513.2%19863,202$450,000$140.54 $500,000 to $799,9995730.0%19974,558$650,000$142.61 $800,000 or more4825.3%19885,561$1,625,000$292.21 Subtotal17491.6%19874,051$602,500$148.73 Multifamily Less than $100,00010.5%1969504$65,000$128.97 $100,000 to $199,99942.1%19921,161$154,950$133.46 $200,000 to $299,99942.1%19971,675$264,400$157.85 $300,000 to $399,99921.1%19902,348$374,950$159.69 $400,000 to $499,99931.6%20023,263$489,900$150.14 $500,000 to $599,99921.1%20032,963$529,900$178.84 Subtotal168.4%19952,016$286,400$142.06 Market Total190100%19883,879$569,000$146.69 Sources: Greater Minneapolis Area Association of Realtors; Maxfield Research & Consulting, LLC TABLE 22 HOMES LISTED FOR SALE HOUSING MARKET AREA March 2017 HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 73 The median size of homes listed for sale is 3,879 square feet which equates to a median price per square foot of $146.69, based on a median list price of $569,000. With a median size of 4,051 square feet, the median price per square foot for single‐family homes is $148.73. Owned multifamily units are somewhat smaller, at 2,016 square feet, and priced lower with a median price of $142.06 per square foot. Equilibrium in the for‐sale residential market is generally considered to be a six‐month sup‐ ply of homes on the market. Since 2014, the HMA has averaged approximately 155 single‐ family sales and 87 multifamily sales per month. Based on the current inventory of homes listed for sale (174 single‐family homes and 16 multifamily units), there is just over a one month supply of single‐family homes and less than one‐month supply of owned multifamily homes on the market in the HMA. Although we anticipate that the supply will increase as the spring/summer months arrive, the current data indicates that the inventory of available for‐sale housing in the HMA is substantially undersupplied. As illustrated in the following graph, except for single‐family homes priced at $600,000 or higher, all other price categories of single‐family homes are currently undersupplied. Nearly all price of single‐family and owned multifamily homes are currently undersupplied in the market. Single‐family homes priced at $600,000 or more have the highest supply of homes on the market and typically take more time to sell. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 74 Selected For‐Sale Multifamily Housing Developments Maxfield Research gathered information on new construction single‐family and owned multi‐ family residential developments in the Housing Market Area in new actively marketing subdivi‐ sions with sales listed through the Greater Minneapolis Area Association of Realtors. Table 23 on the following pages presents information on homes sold in 2016. Data is presented by pro‐ ject and includes the development name, City, style of the project, closed sales, finished square feet, price range, and median price per square foot. The following points summarize the cur‐ rent market for new construction single‐family and owned multifamily residential units in the HMA. A total of 282 new construction single‐family homes in 47 different developments were sold in 2016 in the HMA. Ravinia has been selling well with 16 homes listed as sold, although there are others that have likely been sold by the developer and not listed on the MLS sys‐ tem. Plymouth also has several subdivisions that have been selling well including The En‐ clave on the Greenway, Steeple Hill, Terra Vista and Serenity on the Greenway. Sold units listed on the table have an average size of 3,699 finished square feet, and range from 1,365 finished square feet to 8,499 square feet. Pricing for the sold new construction single‐family homes ranges from $235,266 to $1,519,156. The average sale price for these new construction single‐family homes was $630,211, 88% higher than the 2016 median sale price for previously‐owned multifamily homes in the HMA ($366,000). Detached townhomes comprise the largest proportion of new construction owned multi‐ family units with 82% of the homes sold in 2016 (28), followed by side‐by‐side townhomes. Most single‐family homes have three‐ or four‐bedrooms while townhomes typically have two to three bedrooms. The average size for townhome units was 2,613 square feet and the average price was $535,407, equating to an average per square foot price $204.89. HO U S I N G M A R K E T A N A L Y S I S MA X F I E L D R E S E A R C H A N D C O N S U L T I N G , L L C 75 Ci t y S t y l e N o . S o l d L o w H i g h A v e r a g e L o w H i g h A v e r a g e P r i c e / S F So l d i n 2 0 1 6 ( S i n g l e ‐ F a m i l y ) Ra v i n i a C o r c o r a n S i n g l e ‐ F a m i l y 1 6 2 , 1 4 8 4 , 4 6 6 3 , 1 4 2 $ 4 2 5 , 7 5 2 $ 6 5 4 , 0 9 5 $ 5 33,274$169.72 Wo o d l a n d H i l l s F a r m G r e e n f i e l d S i n g l e ‐ F a m i l y 1 2 , 6 7 0 2 , 6 7 0 2 , 6 7 0 $ 4 1 7 , 00 0 $ 4 1 7 , 0 0 0 $ 4 1 7 , 0 0 0 $ 1 5 6 . 1 8 Ri v e r b e n d E s t a t e s G r e e n f i e l d S i n g l e ‐ F a m i l y 1 2 , 2 3 8 2 , 2 3 8 2 , 2 3 8 $ 5 3 4 , 3 6 6 $ 5 3 4 , 3 6 6 $ 5 3 4 , 3 6 6 $ 2 3 8 . 7 7 Sc h e n d e l ' s F i e l d H a n o v e r S i n g l e ‐ F a m i l y 1 5 1 , 3 6 5 2 , 2 2 5 1 , 6 6 4 $ 2 3 5 , 2 6 6 $ 3 16 , 2 2 2 $ 2 6 4 , 1 6 1 $ 1 5 8 . 7 5 Cr o w R i v e r H e i g h t s H a n o v e r S i n g l e ‐ F a m i l y 7 1 , 7 8 5 2 , 8 2 1 2 , 1 3 6 $ 2 8 5 , 0 0 0 $ 33 7 , 7 2 4 $ 3 0 8 , 7 1 8 $ 1 4 4 . 5 3 Sp r u c e T r e e T e r r a c e H a n o v e r S i n g l e ‐ F a m i l y 3 1 , 4 5 2 2 , 4 8 0 1 , 8 4 3 $ 3 1 0 , 0 0 0 $3 9 4 , 1 9 9 $ 3 3 9 , 0 6 6 $ 1 8 3 . 9 8 Qu a i l P a s s H a n o v e r S i n g l e ‐ F a m i l y 2 1 , 9 4 8 1 , 9 8 2 1 , 9 6 5 $ 2 8 9 , 9 0 0 $ 3 3 2 , 2 6 9 $ 311,085$158.31 Br i d g e s a t H a n o v e r H a n o v e r S i n g l e ‐ F a m i l y 1 2 , 4 7 7 2 , 4 7 7 2 , 4 7 7 $ 4 1 5 , 5 1 0 $ 41 5 , 5 1 0 $ 4 1 5 , 5 1 0 $ 1 6 7 . 7 5 In d e p e n d e n c e W o o d s I n d e p e n d e n c e S i n g l e ‐ F a m i l y 1 2 , 3 3 0 2 , 3 3 0 2 , 3 3 0 $ 4 4 0 ,8 4 1 $ 4 4 0 , 8 4 1 $ 4 4 0 , 8 4 1 $ 1 8 9 . 2 0 Ma r s h 2 n d L o r e t t o S i n g l e ‐ F a m i l y 3 1 , 8 7 1 1 , 8 7 1 1 , 8 7 1 $ 2 7 5 , 2 3 0 $ 2 9 3 , 0 9 0 $ 2 76,000$147.51 Ri v e r b e n d E s t a t e s L o r e t t o S i n g l e ‐ F a m i l y 1 2 , 5 8 0 2 , 7 8 2 2 , 7 0 6 $ 3 9 5 , 0 0 0 $ 4 90 , 0 0 0 $ 4 8 1 , 5 7 4 $ 1 7 7 . 9 7 Do n e g a l M a p l e G r o v e S i n g l e ‐ f a m i l y 6 2 , 4 5 8 3 , 3 3 8 2 , 8 0 6 $ 4 0 9 , 9 9 0 $ 4 7 3 , 0 4 0 $438,335$156.21 Ce d a r c r e s t M a p l e G r o v e S i n g l e ‐ F a m i l y 6 2 , 5 2 1 5 , 2 5 4 4 , 1 2 8 $ 5 7 5 , 0 0 0 $ 8 5 5 , 00 0 $ 6 7 2 , 6 1 0 $ 1 6 2 . 9 4 Ma p l e B r o o k M a p l e G r o v e S i n g l e ‐ F a m i l y 2 2 , 4 7 0 4 , 0 8 0 3 , 2 7 5 $ 6 1 9 , 4 1 7 $ 6 9 9 ,4 8 5 $ 6 5 9 , 6 3 1 $ 2 0 1 . 4 1 Ma p l e T r a c e M a p l e G r o v e S i n g l e ‐ F a m i l y 1 3 , 7 5 2 3 , 7 5 2 3 , 7 5 2 $ 6 7 3 , 4 5 0 $ 6 7 3 ,4 5 0 $ 6 7 3 , 4 5 0 $ 1 7 9 . 4 9 En c l a v e a t D u n l a v i n W o o d s M a p l e G r o v e S i n g l e ‐ F a m i l y 1 4 , 9 6 7 4 , 9 6 7 4 , 9 67 $ 7 0 2 , 1 6 5 $ 7 0 2 , 1 6 5 $ 7 0 2 , 1 6 5 $ 1 4 1 . 3 7 Hi g h l a n d s a t R u s h C r e e k M a p l e G r o v e S i n g l e ‐ F a m i l y 2 4 , 8 2 6 5 , 2 5 4 5 , 0 4 0 $7 6 0 , 7 0 0 $ 8 5 5 , 0 0 0 $ 8 0 7 , 8 5 0 $ 1 6 0 . 2 9 P r e s e r v e a t R u s h C r e e k M a p l e G r o v e S i n g l e ‐ F a m i l y 1 4 , 0 2 8 4 , 0 2 8 4 , 0 2 8 $ 65 5 , 7 8 8 $ 6 5 5 , 7 8 8 $ 6 5 5 , 7 8 8 $ 1 6 2 . 8 1 Sp r i n g B r o o k M a p l e G r o v e S i n g l e ‐ F a m i l y 1 4 , 3 0 8 4 , 3 0 8 4 , 3 0 8 $ 6 4 8 , 9 0 0 $ 6 4 8, 9 0 0 $ 6 4 8 , 9 0 0 $ 1 5 0 . 6 3 St e l l a R i d g e M a p l e G r o v e S i n g l e ‐ F a m i l y 1 4 , 9 3 9 4 , 9 3 9 4 , 9 3 9 $ 5 3 2 , 0 4 5 $ 5 3 2, 0 4 5 $ 5 3 2 , 0 4 5 $ 1 0 7 . 7 2 St e l l a M a r s h v i e w M a p l e G r o v e S i n g l e ‐ F a m i l y 3 2 , 6 0 9 3 , 1 1 3 2 , 8 2 6 $ 4 6 4 , 8 7 0 $ 5 0 8 , 0 0 0 $ 4 8 0 , 2 9 0 $ 1 6 9 . 9 5 Su n s e t R i d g e M a p l e G r o v e S i n g l e ‐ F a m i l y 2 3 , 3 4 9 4 , 0 4 5 3 , 6 9 7 $ 4 4 9 , 9 0 0 $ 5 1 5, 0 0 0 $ 4 8 2 , 4 5 0 $ 1 3 0 . 5 0 Wh i t e O a k A c r e s 2 n d A d d n M a p l e G r o v e S i n g l e ‐ F a m i l y 1 2 , 8 0 8 2 , 8 0 8 2 , 8 0 8 $ 5 9 9 , 9 5 0 $ 5 9 9 , 9 5 0 $ 5 9 9 , 9 5 0 $ 2 1 3 . 6 6 Wh i s t l i n g P i n e s M a p l e G r o v e S i n g l e ‐ F a m i l y 1 6 , 3 2 3 6 , 3 2 3 6 , 3 2 3 $ 1 , 4 4 0 , 0 0 0 $ 1 , 4 4 0 , 0 0 0 $ 1 , 4 4 0 , 0 0 0 $ 2 2 7 . 7 4 ‐‐ ‐ ‐ ‐ c o n t i n u e d ‐ ‐ ‐ ‐ ‐ TA B L E 2 3 NE W C O N S T R U C T I O N H O M E S HO U S I N G M A R K E T A R E A De c e m b e r 2 0 1 6 Si z e R a n g e P r i c e R a n g e HO U S I N G M A R K E T A N A L Y S I S MA X F I E L D R E S E A R C H A N D C O N S U L T I N G , L L C 76 Ci t y S t y l e N o . S o l d L o w H i g h A v e r a g e L o w H i g h A v e r a g e P r i c e / S F So l d i n 2 0 1 6 ( S i n g l e ‐ F a m i l y ) Fi e l d s o f M e d i n a ( W e s t ) M e d i n a S i n g l e ‐ F a m i l y 5 2 , 1 3 0 3 , 4 9 4 2 , 6 0 5 $ 4 1 5 , 64 5 $ 6 2 0 , 8 2 0 $ 4 7 2 , 3 2 4 $ 1 8 1 . 3 1 Fi e l d s o f M e d i n a M e d i n a S i n g l e ‐ F a m i l y 3 2 , 2 2 1 3 , 5 8 8 2 , 7 5 6 $ 4 1 7 , 4 0 4 $ 6 2 5 ,0 0 0 $ 4 8 8 , 5 4 9 $ 1 7 7 . 2 7 En c l a v e a t B r o c k t o n M e d i n a S i n g l e ‐ F a m i l y 7 2 , 4 6 4 5 , 1 9 4 4 , 3 8 6 $ 6 3 4 , 9 9 0 $ 81 2 , 9 7 6 $ 7 1 4 , 0 6 1 $ 1 6 2 . 8 0 Re s e r v e a t M e d i n a M e d i n a S i n g l e ‐ F a m i l y 8 3 , 5 0 8 8 , 4 9 9 5 , 3 8 2 $ 5 8 8 , 3 7 4 $ 1 , 38 2 , 4 9 5 $ 8 8 5 , 0 5 7 $ 1 6 4 . 4 5 Br i d g w a t e r a t L a k e M e d i n a M e d i n a S i n g l e ‐ F a m i l y 1 4 , 8 0 2 4 , 8 0 2 4 , 8 0 2 $ 7 2 5, 0 0 0 $ 7 2 5 , 0 0 0 $ 7 2 5 , 0 0 0 $ 1 5 0 . 9 8 Vi n t a g e a t M e d i n a C o u n t r y C l u b M e d i n a S i n g l e ‐ F a m i l y 1 4 , 1 0 1 4 , 1 0 1 4 , 1 01 $ 1 , 4 3 3 , 4 0 7 $ 1 , 4 3 3 , 4 0 7 $ 1 , 4 3 3 , 4 0 7 $ 3 4 9 . 5 3 Wo o d l a n d H i l l P r e s e r v e M e d i n a S i n g l e ‐ F a m i l y 1 6 , 7 9 0 6 , 7 9 0 6 , 7 9 0 $ 1 , 5 1 9 ,1 5 6 $ 1 , 5 1 9 , 1 5 6 $ 1 , 5 1 9 , 1 5 6 $ 2 2 3 . 7 3 Fl e c t c h e n H i l l s V i l l a s R o g e r s S i n g l e ‐ F a m i l y 5 1 , 4 6 5 2 , 8 5 2 2 , 2 6 5 $ 3 0 9 , 4 64 $ 5 4 4 , 2 3 0 $ 3 7 3 , 6 3 7 $ 1 6 4 . 9 6 Ly n d h a v e n M e a d o w s R o g e r s S i n g l e ‐ F a m i l y 4 1 , 6 1 1 3 , 1 0 4 2 , 3 2 7 $ 3 2 0 , 0 0 0 $ 3 8 5, 0 0 0 $ 3 6 4 , 5 7 0 $ 1 5 6 . 6 7 Ed g e w a t e r S h o r e s R o g e r s S i n g l e ‐ F a m i l y 4 2 , 7 8 5 3 , 7 8 1 3 , 4 0 5 $ 3 6 2 , 9 0 0 $ 3 7 5 ,0 0 0 $ 3 7 0 , 7 0 0 $ 1 0 8 . 8 7 Co p p e r C r e e k P l y m o u t h S i n g l e ‐ F a m i l y 1 1 2 , 2 6 5 5 , 4 7 6 4 , 0 3 5 $ 4 7 8 , 7 6 1 $ 1 , 0 3 4, 6 2 7 $ 5 7 2 , 3 0 4 $ 1 4 1 . 8 3 En c l a v e o n t h e G r e e n w a y P l y m o u t h S i n g l e ‐ F a m i l y 2 0 2 , 4 5 8 4 , 5 2 6 3 , 2 3 5 $ 4 65 , 6 8 5 $ 6 4 5 , 7 8 0 $ 5 1 9 , 5 3 0 $ 1 6 0 . 6 0 Se r e n i t y o n t h e G r e e n w a y P l y m o u t h S i n g l e ‐ F a m i l y 2 0 4 , 4 2 1 6 , 8 0 9 5 , 5 3 1 $ 86 0 , 0 0 0 $ 1 , 3 3 3 , 2 8 6 $ 1 , 1 1 1 , 1 0 9 $ 2 0 0 . 8 9 St e e p l e H i l l P l y m o u t h S i n g l e ‐ F a m i l y 2 1 3 , 0 0 3 4 , 7 0 0 4 , 0 7 0 $ 4 7 4 , 1 3 0 $ 6 6 4 , 35 0 $ 5 5 2 , 6 6 1 $ 1 3 5 . 7 9 Ha m p t o n H i l l s P l y m o u t h S i n g l e ‐ F a m i l y 4 3 , 8 3 9 4 , 9 0 0 4 , 4 7 1 $ 5 9 9 , 5 4 5 $ 7 1 9 , 59 0 $ 6 5 7 , 5 5 7 $ 1 4 7 . 0 7 Pr o v i d e n c e P o i n t e P l y m o u t h S i n g l e ‐ F a m i l y 6 3 , 3 6 3 4 , 2 4 5 3 , 6 1 2 $ 4 1 9 , 9 0 0 $ 50 1 , 5 0 1 $ 4 4 6 , 0 6 7 $ 1 2 3 . 5 0 Br y n w o o d P l y m o u t h S i n g l e ‐ F a m i l y 8 3 , 7 1 7 6 , 2 0 9 4 , 9 9 2 $ 5 7 9 , 0 0 0 $ 8 3 0 , 0 0 0 $ 6 47,366$129.68 As p e n H o l l o w P l y m o u t h S i n g l e ‐ F a m i l y 7 3 , 0 1 0 5 , 6 2 4 3 , 6 9 4 $ 5 2 8 , 7 6 5 $ 8 0 2 , 8 45$649,954$175.95 Wo o d c r e s t H i l l s P l y m o u t h S i n g l e ‐ F a m i l y 9 4 , 0 0 7 5 , 4 3 2 4 , 5 5 4 $ 5 9 7 , 0 0 0 $ 8 3 5, 8 2 6 $ 7 0 6 , 8 1 5 $ 1 5 5 . 2 1 Ma p l e C r e e k M e a d o w s P l y m o u t h S i n g l e ‐ F a m i l y 2 6 4 , 0 3 9 4 , 7 8 0 4 , 2 8 4 $ 5 4 4 , 1 89 $ 8 5 1 , 7 8 6 $ 6 6 4 , 5 7 9 $ 1 5 5 . 1 3 Re s e r v e a t S p r i n g M e a d o w s P l y m o u t h S i n g l e ‐ F a m i l y 1 3 2 , 4 6 9 4 , 6 6 0 3 , 4 8 3 $4 8 0 , 0 0 0 $ 6 7 0 , 0 0 0 $ 5 4 4 , 9 7 5 $ 1 5 6 . 4 7 Od o n n e l l W o o d s P l y m o u t h S i n g l e ‐ F a m i l y 2 6 , 0 0 9 6 , 7 7 6 6 , 3 9 3 $ 1 , 0 3 5 , 0 0 0 $ 1 ,4 7 0 , 6 0 3 $ 1 , 2 5 2 , 8 0 3 $ 1 9 5 . 9 6 Te r r a V i s t a P l y m o u t h S i n g l e ‐ F a m i l y 1 7 3 , 3 1 9 6 , 4 4 5 4 , 7 5 3 $ 5 9 5 , 0 0 0 $ 1 , 0 9 1 ,8 6 8 $ 8 3 2 , 6 8 6 $ 1 7 5 . 1 9 To t a l S o l d 2 0 1 6 2 8 2 1 , 3 6 5 8 , 4 9 9 3 , 6 9 9 $ 2 3 5 , 2 6 6 $ 1 , 5 1 9 , 1 5 6 $ 6 3 0 , 2 1 1 $ 1 7 0 .36 ‐‐ ‐ ‐ ‐ c o n t i n u e d ‐ ‐ ‐ ‐ ‐ TA B L E 2 3 c o n t i n u e d NE W C O N S T R U C T I O N H O M E S HO U S I N G M A R K E T A R E A De c e m b e r 2 0 1 6 Si z e R a n g e P r i c e R a n g e HO U S I N G M A R K E T A N A L Y S I S MA X F I E L D R E S E A R C H A N D C O N S U L T I N G , L L C 77 Ci t y S t y l e N o . S o l d L o w H i g h A v e r a g e L o w H i g h A v e r a g e P r i c e / S F So l d i n 2 0 1 6 ( O w n e d M u l t i f a m i l y ) Fo u r S e a s o n s a t R u s h C r e e k M a p l e G r o v e ( T H ) D e t a c h e d 6 1 , 8 0 0 2 , 3 0 0 2 , 06 1 $ 3 5 9 , 9 0 0 $ 4 3 2 , 5 0 0 $ 3 9 1 , 1 0 0 $ 1 8 9 . 7 6 Hi g h g r o v e a t A r b o r L a k e s M a p l e G r o v e ( T H ) D e t a c h e d 9 1 , 2 4 8 3 , 1 0 2 1 , 8 1 8 $ 2 1 8 , 3 0 8 $ 3 9 4 , 0 0 0 $ 2 8 3 , 9 5 6 $ 1 5 6 . 1 9 Vi l l a s a t R u s h C r e e k M a p l e G r o v e ( T H ) D e t a c h e d 2 2 , 0 2 6 3 , 5 3 3 2 , 7 8 0 $ 4 4 1, 3 5 2 $ 4 4 4 , 6 0 4 $ 4 4 2 , 9 7 8 $ 1 5 9 . 3 4 Vi l l a s a t M e d i n a C o u n t r y C l u b M e d i n a ( T H ) D e t a c h e d 4 3 , 5 6 3 3 , 7 0 8 3 , 6 3 9 $ 8 7 7 , 6 3 2 $ 9 7 7 , 0 2 0 $ 9 0 9 , 6 3 9 $ 2 4 9 . 9 7 Vi l l a s a t B a s s C r e e k P l y m o u t h ( T H ) D e t a c h e d 1 3 , 2 2 0 3 , 2 2 0 3 , 2 2 0 $ 8 3 0 , 3 67 $ 8 3 0 , 3 6 7 $ 8 3 0 , 3 6 7 $ 2 5 7 . 8 8 Fe r n d a l e T e r r a c e P l y m o u t h ( T H ) D e t a c h e d 1 3 , 9 3 8 3 , 9 3 8 3 , 9 3 8 $ 9 8 4 , 9 5 0 $ 9 84 , 9 5 0 $ 9 8 4 , 9 5 0 $ 2 5 0 . 1 1 Vi l l a s a t R i v e r ' s E d g e R o g e r s ( T H ) S i d e x S i d e 5 1 , 5 4 7 2 , 2 4 0 1 , 8 1 1 $ 2 5 6, 6 5 0 $ 3 0 2 , 4 8 7 $ 2 7 3 , 2 6 6 $ 1 5 0 . 8 9 Du t c h K n o l l s R o g e r s ( T H ) S i d e x S i d e 1 1 , 6 3 8 1 , 6 3 8 1 , 6 3 8 $ 1 6 7 , 0 0 0 $ 1 6 7 , 00 0 $ 1 6 7 , 0 0 0 $ 1 0 1 . 9 5 To t a l S o l d 2 0 1 6 2 9 1 , 2 4 8 3 , 9 3 8 2 , 6 1 3 $ 1 6 7 , 0 0 0 $ 9 8 4 , 9 5 0 $ 5 3 5 , 4 0 7 $ 2 0 4 . 8 9 So u r c e s : G r e a t e r M i n n e a p o l i s A r e a A s s o c i a t i o n o f R e a l t o r s ; M a x fi e l d R e s e a r c h & C o n s u l t i n g , L L C TA B L E 2 3 c o n t i n u e d HO U S I N G M A R K E T A R E A De c e m b e r 2 0 1 6 NE W C O N S T R U C T I O N H O M E S Si z e R a n g e P r i c e R a n g e HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 78 For‐Sale Housing Market Demand Analysis Table 24 presents our demand calculations for general occupancy for‐sale housing in the Mar‐ ket Area between 2016 and 2030. The analysis identifies potential demand for general occu‐ pancy for‐sale multifamily housing that is generated from both new households and turnover households. According to our projections, the HMA is expected to grow by 14,851 households between 2016 and 2030. Because the 65 and older cohort is typically not a target market for new gen‐ eral occupancy for‐sale housing, we focus on households between the ages of 18 and 64 that will account for the majority of demand on the subject properties. We also include a portion (25%) of the demand potential generated by households age 65 to 74, as a segment of this age group that is able to live independently could be drawn to a new for‐sale development in Cor‐ coran, particularly for single‐level owned townhome units. We estimate that 55% of the pro‐ jected household growth will generate demand for general occupancy housing units, resulting in projected demand for 8,911 units. Based on household tenure data from the American Community Survey, we expect that 78% of the demand will be for owner‐occupied housing units, equating to a potential 6,977 owner households from household growth. As of 2016, there are an estimated 52,846 owner households under the age of 65 in the HMA. Based on household turnover data from the 2014 American Community Survey, we estimate that 60% of these under‐65 owner households will experience turnover between 2016 and 2030. This estimate results in anticipated turnover of 31,708 existing households by 2030. We then estimate the percent of existing owner households turning over that would prefer to purchase new housing. In the HMA, roughly 8% of all home sales were for new construction since 2008, while over 7% of all sales across the Twin Cities Metro Area were for new homes during the same time period. Considering the current supply of available existing homes in the HMA, which is very low, along with recent sales activity, we estimate that 30% of the house‐ holds turning over in the HMA will desire new housing. This estimate results in demand from existing households for 9,512 new residential units in the HMA between 2016 and 2030. Total demand from household growth and existing household turnover between 2016 and 2030 equates to 16,489 new for‐sale housing units. An additional proportion is added for households that would move into ownership housing in the HMA who currently reside outside the area. We estimate that 20% of the demand potential for general occupancy ownership housing would be derived from outside the HMA, increasing total demand to 20,612 units. Based on new construction sales data from 2008 to present in the HMA along with the age dis‐ tribution of HMA households and recent building permit trends, we estimate that 30% of the householders seeking new housing will desire owned attached housing units while 70% will de‐ sire single‐family homes. HOUSING MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 79 We estimate there will be demand for 14,428 single‐family and 4,947 attached single‐family units in the HMA between 2016 and 2030. We estimate that Corcoran could capture 10% of the HMA single‐family demand potential and 5% of the attached single‐family potential, result‐ ing in demand for an estimated 1,443 single‐family homes and 247 attached single‐family homes in Corcoran by 2030. This estimate is consistent with current Metropolitan Council pro‐ jections. DEMAND FROM PROJECTED HOUSEHOLD GROWTH Projected household growth 2016 to 2030¹ (times) Pct. of HH growth for general occupancy housing2 x (equals) Projected demand for general occupancy units= (times) Propensity to Own3 x (equals) Number of potential owner households from HH growth= DEMAND FROM EXISTING OWNER HOUSEHOLDS Number of owner households (age 64 and younger) in Market Area, 2016= (times) Estimated % of owner turnover (age 64 and younger, 2016 to 2030)4 x (equals) Total existing HHs projected to turnover between 2016 and 2030= (times) Estimated % desiring new owner housingx (equals) Demand from existing households= Total Demand From Household Growth and Existing Households, 2016 to 2030= (times) Ownership demand generated from outside Market Areax (equals) Total demand potential for ownership housing in Market Area= Single‐Family (times) Percent desiring for‐sale housing5 x70% (equals) Total demand potential for new for‐sale multifamily housing=14,428 (times) Proportion of HMA demand capturable in Cocoranx10% (equals) Number of housing units supportable in Corcoran=1,443 2 Pct. of household growth under age 65 plus 25% of age 65 to 74 cohort 3 Pct. Owner households under age 65 from 2010‐2014 American Community Survey 4 Based on household turnover and mobility data (2010‐2014 Ameri can Community Survey). 5 Based on new construction sales data and recent building permit trends * Multifamily demand includes demand for townhomes, twinhomes, and condominium units. Source: Maxfield Research & Consulting, LLC 1 Estimated household growth based per ESRI, Met Council, and Maxfield Research & Consulting, LLC 30% 4,947 5% 247 Multifamily 20% 60% 8,911 52,846 60% 78% 6,977 20,612 31,708 30% 9,512 16,489 TABLE 24 GENERAL OCCUPANCY FOR‐SALE HOUSING DEMAND CORCORAN HOUSING MARKET AREA 2016 TO 2030 14,851 SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 80 Introduction This section provides an assessment of the market support for senior housing, including active adult/few services, congregate (independent living with some services available), assisted living, and memory care). An overview of the demographic and economic characteristics of the senior population along with an inventory of existing and pending senior housing developments in the HMA is presented. Demand for senior housing is calculated based on demographic, economic and competitive factors that would impact demand for additional senior housing units. Senior Housing Defined Senior housing is a concept that generally refers to the integrated delivery of housing and services to seniors. However, as Figure 1 illustrates, senior housing embodies a wide variety of product types across the service‐delivery spectrum. Products range from independent apartments and/or townhomes with virtually no services on one end, to highly specialized, service‐intensive assisted living units or housing geared for people with dementia‐related illnesses (termed "memory care") on the other end of the spectrum. In general, independent senior housing attracts people age 65 and over while assisted living typically attracts people age 80 and older who need assistance with activities of daily living (ADLs). For analytical purposes, Maxfield Research and Consulting, LLC classifies market rate senior housing into five categories based on the level and type of services offered. Active Adult properties (or independent living without services available) are similar to a general‐occupancy building, in that they offer virtually no services but have age‐restrictions (typically 55 or 62 or older). Residents are generally age 70 or older if in an apartment‐style building. Organized entertainment, activities and occasionally a transportation program represent the extent of services typically available at these properties. Because of the lack of services, active adult properties generally do not command the rent premiums of more service‐enriched senior housing. Active adult properties can have a rental or owner‐ occupied (condominium or cooperative) format. Townhome or Apartment Fully Independent Lifestyle Senior Housing Product Type Fully or Highly Dependent on Care Source: Maxfield Research & Consulting, LLC FIGURE 1 CONTINUUM OF HOUSING AND SERVICES FOR SENIORS Single‐Family Home Congregate Apartments w/ Optional Services Assisted LivingNursing Facilities Age‐Restricted Independent Single‐ Family, Townhomes, Apartments, Condominiums, Cooperatives Congregate Apartments w/ Intensive Services Memory Care (Alzheimer's and Dementia Units) SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 81 Congregate properties (or independent living with services available) offer support services such as meals and/or housekeeping, either on an optional basis or a limited amount includ‐ ed in the rents. These properties often dedicate a larger share of the overall building area to common areas, in part, because the units are smaller than in adult housing and in part to encourage socialization among residents. Congregate properties attract a slightly older tar‐ get market than adult housing, typically seniors age 75 or older. Rents are also above those of the active adult buildings. Sponsorship by a nursing home, hospital or other health care organization is common. Assisted Living properties come in a variety of forms, but the target market for most is gen‐ erally the same: very frail seniors, typically age 80 or older (but can be much younger, de‐ pending on their particular health situation), who are in need of extensive support services and personal care assistance. Absent an assisted living option, these seniors would other‐ wise need to move to a nursing facility. At a minimum, assisted living properties include two meals per day and weekly housekeeping in the monthly fee, with the availability of a third meal and personal care (either included in the monthly fee or for an additional cost). Assisted living properties also have either staff on duty 24 hours per day or at least 24‐hour emergency response. Memory Care properties, designed specifically for persons suffering from Alzheimer’s dis‐ ease or other dementias, is one of the newest trends in senior housing. Properties consist mostly of suite‐style or studio units or occasionally one‐bedroom apartment‐style units, and large amounts of communal areas for activities and programming. In addition, staff typical‐ ly undergoes specialized training in the care of this population. Because of the greater amount of individualized personal care required by residents, staffing ratios are much high‐ er than traditional assisted living and thus, the costs of care are also higher. Unlike conven‐ tional assisted living, however, which addresses housing needs almost exclusively for wid‐ ows or widowers, a higher proportion of persons afflicted with Alzheimer’s disease are in two‐person households. That means the decision to move a spouse into a memory care fa‐ cility involves the caregiver’s concern of incurring the costs of health care at a special facility while continuing to maintain their home. Skilled Nursing Care, or long‐term care, provides a living arrangement that integrates shel‐ ter and food with medical, nursing, psychosocial and rehabilitation services for persons who require 24‐hour nursing supervision. Residents in skilled nursing homes can be funded un‐ der Medicare, Medicaid, Veterans, HMOs, insurance as well as use of private funds. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 82 Older Adult (Age 55+) Population and Household Trends The Demographic Review section of this study presented general demographic characteristics of the HMA population. The following points summarize key findings from that section as they pertain to the older adult population in the Market Area. The greatest population and household growth is projected to occur among older adults in the Market Area. Aging of baby boomers led to an increase of 17,604 people (90%) in the 55 to 64 population between 2000 and 2010 in the HMA. As this group ages, all cohorts age 55 or greater are expected to see increases over the next several years, particularly the 70 to 74 age group which is projected to grow 43% (2,467 people) in the HMA between 2016 and 2021. The primary market for service‐enhanced housing is senior households age 75 and older. While individuals in their 50s and 60s typically do not comprise the market base for service‐ enhanced senior housing, they often have elderly parents to whom they provide support when they decide to relocate to senior housing. Since elderly parents typically prefer to be near their adult caregivers, growth in the older adult age cohort (age 55 to 64) generally re‐ sults in additional demand for senior housing products. The frailer the senior, the greater the proportion of their income they will typically spend on housing and services. Studies have shown that seniors are willing to pay increasing propor‐ tions of their incomes on housing with services, beginning with an income allocation of 40% to 50% for market rate active adult senior housing with little or no services, increasing to 65% for congregate housing and to 80% to 90% or more for assisted living housing. The proceeds from the sales of their homes, as well as financial assistance from their adult chil‐ dren, are often used as supplemental income in order to afford senior housing alternatives. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 83 The key market for active adult/few services housing is comprised of senior households (age 65+), with incomes of $35,000 or more. The age threshold increases to 70+ if in an apart‐ ment‐style building. In 2016, we estimated there were 9,836 age‐ and income‐qualified households in the HMA that comprise the key market for active adult housing. Including all households with incomes of $40,000 and over (adjusted for inflation), the number of age 65+ senior households projected to income‐qualify for active adult/few services housing is expected to grow to 11,943 households in 2021 (21.4%). Congregate housing demand is driven by senior households (age 75+) with incomes of $35,000 or more. We estimate the number of age‐ and income‐qualified households in the HMA to be 3,018 householders in 2016, increasing to 3,541 householders (17.3%) in 2021. The target market for assisted living housing is senior households age 75 and older with in‐ comes of at least $40,000 (plus senior homeowners with lower incomes). As of 2016, there are an estimated 2,644 older senior households (age 75+) in the HMA with incomes of at least $40,000, accounting for half of all older senior households. Including all households with incomes of $45,000 and over (adjusted for inflation), the number of older senior households projected to income‐qualify for senior housing with services is expected to grow to 3,061 households in 2021 (16%). Memory care housing has a target market of senior households age 65 and older with a memory impairment and incomes of at least $60,000. In 2016, we estimated that there were 6,338 age 65+ households in the HMA with incomes of at least $60,000, accounting for 45% of all senior households. The number of income‐qualified ($65,000 adjusted for infla‐ tion) households is projected to increase to 8,375 by 2021 (32%). We estimate that roughly 15% of the senior population has a memory impairment. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 84 Homeownership information lends insight into the number of households that may still have homes to sell and could potentially supplement their incomes from the sales of their homes to support monthly fees for alternative housing. The HMA maintains a fairly high homeownership in the older adult age cohorts relative to the Metro Area. The estimated homeownership rate in 2015 was 90% for age 55 to 64 households compared to 81% throughout the Twin Cities. The HMA homeownership rate decreases to 89% for age 65 to 74 households compared to 83% in the Metro Area. Seniors typically begin to consider moving into senior housing alternatives in their early to mid‐70s. This movement pattern is demonstrated by the drop in homeownership between the 65 to 74 age cohort (89%) and the 75+ age cohort (75%). Throughout the Metro Area, the home‐ ownership rate dropped from 83% (age 65 to 74) to 69% (age 75+) during the same time pe‐ riod. With a homeownership rate of 83% for all households age 65 and older as of 2015, many residents would be able to use proceeds from the sales of their homes toward senior hous‐ ing alternatives. The resale of single‐family homes would allow additional senior house‐ holds to qualify for market rate housing products, since equity from the home sale could be used as supplemental income for alternative housing. These considerations are factored in‐ to our demand calculations presented in a following section of this study. Home sale data is useful in that it represents the amount of equity seniors may be able to derive from the sales of their homes that could be used to cover the cost of senior housing alternatives. The median sale price of single‐family homes in the HMA climbed from a low of $210,000 in 2011 to $336,000 in 2016, representing a 60% increase. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 85 Based on the year‐end 2016 median sale price for single‐family homes in the HMA ($336,000), a senior household could generate approximately $6,326 of additional income annually (about $526 per month), if they invested in an income‐producing account (2.0% in‐ terest rate) after accounting for marketing costs and/or real estate commissions (6.0% of home sale price). Should a senior utilize the home proceeds dollar for dollar to support living in senior hous‐ ing with services, the proceeds of the home sale would last over ten years in congregate housing (monthly rent approximated at $2,300), almost seven years in assisted living (monthly rent approximated at $3,800), or about 5.5 years in memory care housing (month‐ ly rent approximated at $4,800). Seniors in service‐intensive housing typically have lengths of stays between two and three years indicating that a large portion of HMA seniors will be financially prepared to privately pay for their housing and services. Supply of Senior Housing in the HMA Tables 24 and 25 show the inventory of existing market rate senior housing products in the HMA that would be competitive with a new senior housing development in Corcoran. As dis‐ played in Table 24, we identified 11 active adult/few services (ownership and rental) properties in the HMA with a total of 831 units. We also identified another 19 service‐enhanced facilities in the HMA (Table 25) with a total of 1,565 service‐enhanced senior housing units. These units are incorporated into our demand calculations presented later in this report, but not all units are included. Because certain facilities may be located near the edges of the HMA boundary, those facilities would have different draw areas that overlap with the Market Area for the subject property. As such, we adjust the number of competitive units based on the lo‐ cation of the property in the HMA. Generally, all properties within a three‐mile radius are considered to be fully competitive with a potential project in Corcoran, while 75% of the units in properties situated within a three‐ to five‐mile radius are considered competitive. We consider 50% of the units com‐ petitive at properties that are slightly further away (within a five‐ to nine‐mile radius). Facil‐ ities located near the edge of the HMA boundary that are more than nine miles away from Corcoran would likely have a significantly different draw area than a property located in Corcoran. Therefore, we consider only 25% of those units to be competitive. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 86 We identified four active adult rental properties with 338 units and 7 ownership properties with 493 units. The active adult properties were constructed between 1994 and 2005. We identified 7 congregate properties, 11 facilities providing assisted living services, and 8 properties with memory care units. In total, we identified 672 congregate units, 580 assist‐ ed living units and 313 units of memory care in the HMA. Most of the service‐enhanced senior housing product in the HMA is relatively new, as 72% of the units have been built since 2000 (1,116 units), with 49% of the units opening since 2010 (749 units). DevelopmentCit y Year BuiltTotal Units Applewood Pointe of Maple GroveMaple Grove200485 Belvedere at ChapelwoodMaple Grove200436 Reallife Cooperative of OsseoOsseo200377 Gramercy NWPlymouth200277 Gramercy PlymouthPlymouth199956 Cornerstone CooperativePlymouth200077 Medina Ridge CondominiumsMedina200485 Total 493 Woodland MoundsMaple Grove199670 Vicksburg CrossingPlymouth200696 Plymouth Towne SquarePlymouth199497 Heritage PlaceRogers200575 Total 338 TABLE 25 MARKET RATE ACTIVE ADULT/FEW SERVICES SENIOR HOUSING PROPERTIES HOUSING MARKET ARA March 2017 Active Adult Ownership Source: Maxfield Research & Consulting, LLC Active Adult Rental SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 87 There are four properties with 617 service‐enhanced housing units (40% of the HMA’s sup‐ ply) located in Maple Grove and 637 units (41%) are located in Plymouth. The Wellstead of Rogers has a regional draw for memory care and draws a portion of its resident base from the entire 7‐County Metropolitan Area and beyond. There are no senior properties in Cor‐ coran at this time. DevelopmentCit y Year BuiltTotal Units Silver Creek on MainMaple Grove2015154 Arbor Lakes Senior LivingMaple Grove201072 Rose Arbor ChapelwoodMaple Grove199995 Steeple PointOsseo200429 SummerwoodPlymouth199568 Waters Senior LivingPlymouth201345 Trillium WoodsPlymouth20152092003 Total 672 Silver Creek on MainMaple Grove201541 Arbor Lakes Senior LivingMaple Grove201057 Rose Arbor ChapelwoodMaple Grove199995 Steeple PointOsseo200459 Osseo GardensOsseo200140 SummerwoodPlymouth200228 CornerstonePlymouth200484 Waters Senior LivingPlymouth201345 Trillium WoodsPlymouth201544 Bryant HouseMaple Plain199021 Wellstead of RogersRogers200266 Total 580 The Willows of Arbor LakesMaple Grove201651 Arbor Lakes Senior LivingMaple Grove201024 Wildflower LodgeMaple Grove199928 Alterra Clare BridgePlymouth199846 CornerstonePlymouth200428 SummerwoodPlymouth200324 Trillium WoodsPlymouth201516 Wellstead of RogersRogers199996 Total 313 Memory Care Source: Maxfield Research & Consulting, LLC Assisted Living Congregate TABLE 26 MARKET RATE SERVICE ENHANCED SENIOR HOUSING PROPERTIES HOUSING MARKET AREA March 2017 SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING, LLC 88 Five of the service‐enhanced facilities offer three levels of care (Congregate, Assisted Living, and Memory Care) including Silver Creek on Main and Chapelwood (Maple Grove), Trillium Woods, Summerwood and Cornerstone (Plymouth). Waters Senior Living – Plymouth, Ar‐ bor Lake Senior Living in Maple Grove, Steeple Point in Osseo provide independent and as‐ sisted living service levels and Wellstead of Rogers provides assisted living and memory care services. The remaining properties offer a single care level; Clarebridge of Plymouth (Memory Care), Willows of Arbor Lakes (Memory Care – Maple Grove) and Bryant House (Assisted Living – Maple Plain). Pending Senior Housing Developments in the HMA In order to assess future competition for a potential senior housing development in Corcoran, Maxfield Research interviewed planning staff from the communities comprising the HMA to identify any senior housing developments that are proposed, planned, or under construction in the HMA and may impact senior housing demand in the Market Area. These projects are sum‐ marized in the following points and in Table 27. We identified three pending projects in HMA, totaling 323 senior housing units, including 93 units currently under construction; another 230 units have been proposed but are not yet approved. The developments pending the HMA are predominantly targeted to an active or independ‐ ent living arrangement, while only 23 units would be memory care. There has recently been a slowdown in the number of assisted living units that have been approved as vacancies among assisted living properties have been increasing most recently. Project NameTotalService LocationCityUnitsLevel*DeveloperStatus/Notes Cherrywood PointePlymouth9364 IL/AL, United PropertiesUnder Construction 17977 Old Rockford Road23 MC2017 Completion Four Seasons Mall SitePlymouth150IL Rock Hill Mgmt.Speculative; Proposed 157th St W at Cobblestone Lunski Active AdultMedina80Active AdultLunski Inc.Proposed Hwy 55 and Hwy 101 Pending Total:323 *IL = Independent Living (congregate), AL = Assisted Living, MC = Memory Care Source: Maxfield Research & Consulting, LLC TABLE 27 PENDING SENIOR HOUSING DEVELOPMENTS HOUSING MARKET AREA March 2017 SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 89 Senior Housing Demand Calculations Tables 28 through 31 on the following pages present our demand calculations for market rate senior housing in the HMA in 2016 and 2021. Market Rate Adult/Few Services Senior Housing Demand Table 28 presents our demand calculations for market rate active adult/few services housing in the HMA in 2016 and 2021. The market for active adult/few services housing is comprised of older adult (age 55 to 64), younger senior (age 65 to 74) and older senior (age 75+) households, with market demand weighted most heavily toward older seniors. In order to arrive at the potential age‐, income‐ and asset‐qualified base for active adult hous‐ ing, we include all age‐qualified households with incomes of $35,000 or more plus homeowner households with incomes between $25,000 and $34,999 who would qualify with the proceeds from a home sale. The number of qualifying homeowner households is estimated by applying the appropriate homeownership rate to each age cohort. We estimate there are 23,482 age‐, income‐ and asset‐qualified HMA households that comprise the market for active adult housing in 2016, increasing to 26,199 qualified households in 2021. Adjusting to include appropriate capture rates for each age cohort (0.5% of households age 55 to 64, 7.5% of households age 65 to 74, and 15.0% of households age 75 and older) results in a demand potential for 1,094 active adult housing units in 2016 and 1,311 units in 2021. These capture rates reduce the total number of age/income/asset‐qualified households to consider only the portion of older adult and senior households who would be able, willing, and inclined to move to senior housing alternatives, including both owner‐ and renter‐occupied housing. We estimate that seniors currently residing outside the HMA will generate 20% of the demand for active adult housing – increasing demand to 1,368 active adult units in 2016. Demand from outside the HMA includes parents of adult children living in the area, individuals who live out‐ side the HMA but have an orientation to the area, and former residents who desire to return upon retirement. Demand for active adult/few services housing in the HMA is apportioned between ownership and rental product types. Based on the age distribution of the population, homeownership rates, existing product, and trends for active adult housing products, we project that 50% of the demand will be for owner‐occupied active adult housing (684 units in 2016), and the remaining 50% of demand will be for active adult rental housing units (684 units in 2016). From the demand potential, we subtract existing and pending active adult units in the HMA at 95% occupancy. We identified 493 active adult ownership units and 338 active adult rental units in the HMA. Overall, we subtract 468 competitive ownership units and 321 rental units from the 2016 demand potential after accounting for a 5% vacancy rate. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 90 In total, we find excess demand for 216 active adult ownership units and 363 active adult rental units in 2016. Adjusting for inflation, we estimate that households with incomes of $40,000 or more and home‐owners with incomes of $35,000 to $39,999 would be candidates for active adult housing in 2021. Following the same methodology and incorporating pending active adult units in the HMA, we estimate that excess demand will increase to 351 active adult ownership units and 397 active adult rental units by 2021. No single site can capture all of the potential demand in a Market Area. We estimate that a project in Corcoran could capture roughly 15% of the excess demand for a total of 86 active adult units in 2016 (32 owner and 54 renter) and 111 units in 2021 (53 owner and 60 renter). 55‐6465‐7475+55‐6465‐7475+ # of Households w/ Incomes of >$35,0001 12,7796,8173,01813,1778,3933,533 # of Households w/ Incomes of $30,000 to $34,9991 +319334378 +368459475 (times ) Homeownership Rate x 90%89%75%x 90%89%75% (equals) Total Potential Market Base=13,0667,1143,302=13,5088,8023,889 (times) Potential Capture Rate x0.5%7.5%15.0%x0.5%7.5%15.0% (equals) Demand Potential =65534495=68660583 Potential Demand from HMA Residents =1,094 =1,311 (plus) Demand from Outside HMA (20%)2 +274+328 (equals) Total Demand Potential=1,368=1,639 OwnerRenterOwnerRenter (times) % by Product Typex50%x50%x50%x50% (equals) Demand Potential by Product Type=684=684=819=819 (minus) Existing and Pending MR Active Adult Units3 ‐468‐321‐468‐321 (equals) Excess Demand for MR Active Adult Units =216 =363 =351 =397 (times) Percent capturable in Corcoranx15%x15%x15%x15% (equals) # of units supportable in Corcorn =32 =54 =53 =60 Source: Maxfield Research & Consulting, LLC 3 Existing and pendin g units are deducted at market equilibrium (95% occupancy). 20162021 Age of HouseholderAge of Householder 2 We estimate that roughly 20% of demand will come from outside the HMA. TABLE 28 MARKET RATE ACTIVE ADULT/FEW SERVICES HOUSING DEMAND HOUSING MARKET AREA 2016 & 2021 1 2021 calculations define income‐qualified households as all households with incomes greater than $40,000 and homeowner households with incomes between $35,000 and $39,999. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 91 Estimated Demand for Congregate Senior Housing Table 29 presents our demand calculations for congregate living senior housing in the HMA in 2016 and 2021. This analysis focuses on the potential private pay/market rate demand for con‐ gregate living units in the area. In order to arrive at the potential age‐income qualified base for congregate senior housing, we include all senior households with incomes of $35,000 or more and homeowners with incomes between $25,000 and $35,000 who would qualify with the proceeds from a home sale (this proportion was estimated based on the homeownership rates for each age cohort). Senior householders with incomes of $35,000 allocating 65% of their income toward base housing cost could afford beginning rents of $1,900, which is near to the monthly fees for a one‐bedroom unit at Rose Arbor of Chapelwood (ranges from $1,410 to $1,915). We estimate the number of age/income/asset‐qualified households in the Market Area to be 10,416 householders in 2016, increasing to 12,691 in 2021. Demand for congregate housing is need‐driven, which reduces the qualified market to only the portion of seniors who need some assistance. Thus, the age/income‐qualified base is multiplied by the percentage of seniors who need some assistance with IADLs (at least three), but not six or more ADLs/IADLs, as these frailer seniors would need the level of care found in service‐ intensive assisted living. According to the Summary Health Statistics of the U.S. Population: National Health Interview Survey, 2007 (conducted by the U.S. Department of Health and Human Services), the percent‐ age of seniors having limitation in activities of daily living (bathing, dressing, toileting, transfer‐ ring, eating) and instrumental activities of daily living (using the phone, shopping, food prepara‐ tion, housekeeping, laundry, transportation, medication, handling finances) are as follows: Limitation in ADLs & IADLs Age ADLs IADLs 65‐74 years 3.3% 6.3% 75+ years 11.0% 20.0% It is most likely that seniors who need assistance with ADLs also need assistance with multiple IADLs, and are more likely to be candidates for service‐intensive assisted living. The prime can‐ didates for congregate living are seniors needing assistance with IADLs, but not ADLs. We de‐ rive the capture rate for congregate housing by subtracting the percentage of seniors needing assistance with ADLs from those needing assistance with IADLs, which equates to 3.0% of sen‐ iors age 65 to 74 and 9.0% of seniors 75+. For the purposes of this report and understanding current market conditions, we have reduced the potential capture rates for the 65 to 74 age group to 1.5% while increasing the capture rate of the 75+ age group to 13.5%. Multiplying the senior household base by these capture rates results in HMA demand potential for 552 congregate units in 2016 and 657 units in 2021. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 92 We estimate that seniors currently residing outside the HMA will generate 20% of the demand for congregate senior housing – increasing total demand by 138 congregate units. This demand consists primarily of parents of adult children living in the HMA, individuals who live just out‐ side the HMA and have an orientation to the area, retirees who wish to relocate to the area and former residents who want to return upon retirement. Together, demand from HMA seniors and demand from seniors who would relocate to the area totals 691 congregate units. Next, existing and pending congregate units are subtracted from overall demand. There are seven market rate facilities with a total of 672 congregate units in the HMA. Overall, we sub‐ tract 480 competitive units after making adjustments for location and format and accounting for a 5% vacancy rate from the demand potential, resulting in excess demand potential for 211 congregate units in 2016. After including the congregate units currently under construction in the HMA, excess demand potential increases to 311 congregate units in 2021. # of Householders w/ Incomes of $35,000+ in 2016 / $40K in 2021 (plus)++ # of Hhldrs w/ Incomes of $30K ‐ $35K in 2016 / $35K ‐ $40K in 2021 (times) Homeownership Ratexx (equals) Potential Market== (equals) Total Potential Market Base== (times) Potential Capture Rate of Congregate Living Demand1 xx (equals) Potential Demand=+=+ Total Local Demand Potential== (plus) Demand from Outside the HMA (20%)++ (equals) Total Demand Potential== (minus) Existing Competitive Units 2 ‐‐ (equals) Excess Limited‐Care Demand Potential== (times) Proportion Capturable in Corcoranxx (equals) Excess Congregate Demand Potential in Corcoran == Source: Maxfield Research & Consulting, LLC 89%75%89%75% 1.5%13.5%1.5%13.5% 7,1143,3028,8023,889 2 Competitive existing and pending units at 95% occupancy (market equilibrium). 107 334378459475 164 297284409356 446132525 552657 138 691821 480510 211311 15%15% 3247 1 The potential capture rate is derived from data from the Summary Health Statistics for the U.S. Population: National Health Interview Survey, 2007 by the U.S. Department of Health and Human Services. The capture rate used is the percentage of seniors needing assistance with IADLs, but not ADLs (seniors needing assistance with ADLs typcially need assistance with multiple IADLs and are primary candidates for s ervice‐intensive assisted living.). TABLE 29 CONGREGATE LIVING DEMAND HOUSING MARKET AREA 2016 & 2021 6,8173,0188,3933,533 20162021 Age of Householder Age of Householder 65‐7475+65‐7475+ SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 93 No single site can capture all of the potential demand in a Market Area. We estimate that a project in Corcoran could capture 15% of the excess demand potential for a total of 32 congre‐ gate units in 2016. Projected growth in the age‐ and income‐qualified population will outpace the delivery of new congregate units in the HMA, causing excess demand capturable in Corco‐ ran to increase to 47 units in 2021. Estimated Demand for Assisted Living Housing Table 30 presents demand calculations for assisted living housing in the HMA in 2016 and 2021. This analysis focuses on the potential private pay/market rate demand for assisted living units in the Market Area. The availability of more intensive support services such as meals, housekeeping and personal care at assisted living facilities usually attracts older, frailer seniors. According to the 2009 Overview of Assisted Living (which is a collaborative research project by the American Associa‐ tion of Homes and Services for the Aging, the American Seniors Housing Association, National Center for Assisted Living, and National Investment Center for the Seniors Housing and Care In‐ dustry), the average age of residents in freestanding assisted living facilities was 87 years in 2008. Hence, the age‐qualified market for assisted living is defined as seniors ages 75 and over, as we estimate that of the half of demand from seniors under age 87, almost all would be over age 75. In 2016, there are an estimated 8,116 seniors ages 75 and over in the HMA. It is pro‐ jected that this number will increase to 10,760 in 2021. Demand for assisted living housing is need‐driven, which reduces the qualified market to only the portion of seniors who need assistance. According to a study completed by the Centers for Disease Control and the National Center for Health Statistics (Health, United States, 1999 Health and Aging Chartbook), about 35% of seniors needed assistance with everyday activities (from 25.5% of 75‐to‐79‐year‐olds, to 33.6% of 80‐to‐84‐year‐olds and 51.6% of 85+ year olds). Applying these percentages to the senior population yields a potential assisted living market of an estimated 2,818 seniors in the HMA in 2016 and 3,671 seniors in 2021. Due to the supportive nature of assisted living housing, most daily essentials are included in monthly rental fees which allow seniors to spend a higher proportion of their incomes on hous‐ ing with basic services. Therefore, the second step in determining the potential demand for as‐ sisted living housing in the HMA is to identify the income‐qualified market based on a senior’s ability to pay the monthly rent. We consider seniors in households with incomes of $40,000 or greater to be income‐qualified for assisted living senior housing in the HMA. Households with incomes of $40,000 could afford monthly assisted living fees of $3,500 by allocating a high pro‐ portion of their income toward the fees. According to the 2009 Overview of Assisted Living, the average arrival income of assisted living residents in 2008 was $27,260, while the average annual assisted living fee was $37,281 ($3,107/month). This data highlights that seniors are spending down assets to live in assisted living and avoid institutional care. Thus, in addition to households with incomes of $40,000 or SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 94 greater, there is a substantial base of senior households with lower incomes who income‐ qualify based on assets – their homes, in particular. An estimated 75% of age 75+ households in the HMA are homeowners and the estimated me‐ dian sale price of homes owned by seniors in the HMA is $277,000. Seniors selling their homes for the median price would generate $260,000 in proceeds after selling costs. Using an average monthly fee of $3,500, these proceeds would last just over six years (74 months) in assisted liv‐ ing housing, which is longer than the average length of stay in assisted living (20 months ac‐ cording to the 2009 Overview of Assisted Living). We estimate the income‐qualified percentage to be all seniors in households with incomes at or above $40,000 (who could afford monthly rents of $3,500+ per month) plus 40% of the esti‐ mated seniors in owner households with incomes below $40,000 (who will spend down assets, including home‐equity, in order to live in assisted living housing). This results in a total poten‐ tial market for 1,832 units from the HMA in 2016. Because the vast majority of assisted living residents are single (88% according to the 2009 Overview of Assisted Living), our demand methodology multiplies the total potential market by the percentage of seniors age 75+ in the HMA living alone, or 46% based on Census data. This results in a total base of 843 age/income‐qualified singles. The 2009 Overview of Assisted Liv‐ ing found that 12% of residents in assisted living were couples. Including couples results in a to‐ tal of 958 age/income‐qualified seniors needing assistance in the HMA in 2016. We estimate that 60% of the qualified market needing significant assistance with ADLs could ei‐ ther remain in their homes or less service‐intensive senior housing with the assistance of a family member or home health care, or would need greater care provided in a skilled care facili‐ ty. The remaining 40% could be served by assisted living housing. Applying this market pene‐ tration rate of 40% results in demand for 383 assisted living units in 2016. We estimate that a portion of demand for assisted living units in the HMA (20%) will come from outside the area. This secondary demand will include seniors currently living just outside the area, former residents, and parents of adult children who desire supportive housing near their adult children. Applying this figure results in total demand for 479 assisted living units in 2016. Next, existing assisted living units are subtracted from overall demand. There are 11 existing properties in the HMA with a total of 580 assisted living units. However, we adjust the number of competing units based on location and format and exclude estimated units occupied by low‐ income seniors utilizing Elderly Waivers. After subtracting the existing units (minus a 7% vacan‐ cy factor) from the total demand equals an excess demand potential for 55 assisted living units in the HMA in 2016. Following this same methodology, and adding in the pending units in the HMA, we project that total excess demand in the HMA will increase to 146 units in 2021. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 95 As mentioned previously, no single site can capture all of the potential demand in a Market Ar‐ ea. We estimate Corcoran could capture 15% of the excess demand for a total of 8 assisted liv‐ ing units in 2016. Growth in the supply of assisted living units in the PMA will lag projected growth in the age‐ and income‐qualified population and the excess demand potential captura‐ ble in Corcoran will increase to 22 units in 2021. PercentPercent NeedingNeeding Age groupPeopleAssistance¹PeopleAssistance¹ 75 ‐ 793,64225.5%5,13525.5% 80 ‐ 842,32933.6%3,00433.6% 85+2,14551.6%2,62151.6% Total8,11610,760 Percent Income‐Qualified 2 Total potential market (times) Percent living alonex (equals) Age/income‐qualified singles needing assistance= (plus) Proportion of demand from couples (12%)³+ (equals) Total age/income‐qualified market needing assistance= (times) Potential penetration rate4 x (equals) Potential demand from HMA residents= (plus) Proportion from outside the HMA (20%)+ (equals) Total potential assisted living demand= (minus) Existing market rate assisted living units 5 ‐ (equals) Total excess market rate assisted living demand= (times) Percent that could be captured in Corcoranx (equals) Excess market rate assisted living demand in Corcoran= Source: Maxfield Research & Consulting, LLC 46%46% 8431,047 1,1071,352 1,8322,276 65%62% TABLE 30 MARKET RATE ASSISTED LIVING DEMAND HOUSING MARKET AREA 2016 & 2021 20162021 NumberNumber NeedingNeeding 2,8183,671 Assistance1 Assistance1 9291,309 7831,009 115143 9581,190 40%40% 383476 96119 479595 4 We estimate that 60% of the qualified market needing assistanc e with ADLs could either remain in their homes or reside at less advanced senior housing with the assistance of a family member or home health care, or would need greater care provided in a skilled care facility. 5 Existing and pending units at 93% occupancy, minus units estimated to be occupied by Elderly Waiver residents. 1 The percentage of seniors unable to perform or having difficul ting with ADLs, based on the publication Health, United States, 1999 Health and Aging Chartbook, conducted by the Centers for Disease Control and Prevention and the National Center for Health Statistics. 2 Includes households with incomes of $40,000 or more (who could afford monthly rents of $3,000+ per month) plus 40% of the estimated owner households with incomes below $40,000 (who will spend down assets, including home‐equity, in order to live in assisted living housing). 3 The 2009 Overview of Assisted Living (a collaborative project of AAHSA, ASHA, ALFA, NCAL & NIC) found that 12% of assisted living residents are couples. 15%15% 822 424449 55146 SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 96 Estimated Demand for Memory Care Housing Table 31 presents our demand calculations for memory care housing in the HMA in 2016 and 2021. Demand is calculated by starting with the estimated HMA senior (ages 65+) population in 2016 and multiplying by the incidence rate of Alzheimer’s/dementia among this population’s age cohorts. This yields a potential market of 2,325 seniors in the HMA. We project that this number will climb to 3,027 in 2021. According to data from the National Institute of Aging, an estimated 25% of all individuals with memory care impairments are a market for memory care housing units. This figure considers that seniors in the early stages of dementia will be able to live independently with the care of a spouse or other family member, while those in the latter stages of dementia will require inten‐ sive medical care that would only be available in skilled care facilities. Applying this figure to the estimated population with memory impairments yields a potential market of 581 seniors in the HMA in 2016 and 757 in 2021. Because of the staff‐intensive nature of dementia care, typical monthly fees for this type of housing start at about $4,500. Although some of the seniors will have high monthly incomes, most will be willing to spend down assets and/or receive financial assistance from family mem‐ bers to afford memory care housing. Based on our review of senior household incomes in the HMA, homeownership rates, and home sale data, we estimate that 57% of all HMA seniors have incomes and/or assets to sufficiently cover the costs for memory care housing. This figure takes into account married couple households where one spouse may have memory care needs and allows for a sufficient income for the other spouse to live independently. Multiplying the potential market (581 seniors) by 57% results in a total of 331 income‐qualified seniors in the HMA in 2016. We estimate that 20% of the overall demand for memory care housing would come from outside the HMA, for a total demand of 414 units in 2016. Currently, there are 8 properties with 313 memory care units in the HMA. We adjust the num‐ ber of competitive units based on format and location within the HMA, subtract 15% of the units (excluding Elderly Waivers), and allocate a 7% vacancy factor for a total excess demand potential for 175 memory care units in 2016. We then add the competitive memory care units pending in the HMA and subtract the total from the 2021 demand, resulting in excess demand potential for 301 units in 2021. Applying the 10% capture rate results in excess demand for 18 memory care units capturable in Corcoran in 2016. Anticipated growth in the age‐ and income‐qualified population will outpace growth in the supply of memory care units in the HMA, causing demand potential to increase to 30 units in 2021. SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 97 65 to 74 Population (times) Dementia Incidence Rate1 xx (equals) Estimated Senior Pop. with Dementia== 75 to 84 Population (times) Dementia Incidence Rate1 xx (equals) Estimated Senior Pop. with Dementia== 85+ Population (times) Dementia Incidence Rate1 xx (equals) Estimated Senior Pop. with Dementia== (equals) Total Population with Dementia (times) Percent Needing Specialized Memory Care Assistancex (equals) Total Need for Dementia Care== (times) Percent Income/Asset‐Qualified2 xx (equals) Total Income‐Qualified Market Base== (plus) Demand from Outside the Market Area (20%)++ Total Demand for Memory Care Units (minus) Existing and Pending Memory Care Units 3 ‐‐ (equals) Excess Housing Market Area Demand Potential== (times) Estimated Percent Capturable in Corcoranxx (equals) Excess Memory Care Demand Capturable in Corcoran== Source: Maxfield Research & Consulting, LLC 2 Income greater than $60,000 in 2016 and greater than $65,000 in 2021, p lus some lower‐income homeowners. 19% 2016 14,476 2% 290 5,971 1,134 2,145 42% 558 257 8,139 ¹ Alzheimer's Association: Alzheimer's Disease Facts & Figures (2007) 3 Existing and p ending units at 93% occup ancy, minus units estimated to be occup ied by Elderl y Waiver residents. 901 331 83 414 2,325 57% 239 TABLE 31 MEMORY CARE DEMAND HOUSING MARKET AREA 2016 & 2021 59% 3,027 25% 757 25% 581 112 2021 18,983 2% 380 42% 1,101 19% 1,546 2,621 446 3018 301175 10%10% SENIOR HOUSING ANALYSIS MAXFIELD RESEARCH AND CONSULTING 98 Senior Housing Demand Summary As described below, our assessment of the factors impacting demand for senior housing, includ‐ ing demographic, economic and competitive variables, supports new active adult, congregate, assisted living and memory care senior housing in the HMA in 2016. The total supply of senior housing units in the HMA is expected to increase by 87 units over the next 12 months with the addition of new units, but the growing older adult and senior population should maintain long‐ term demand for senior housing alternatives in the HMA. Table 32 below summarizes our demand calculations for market rate senior housing in the HMA. There is currently excess demand for 925 active adult/few services units and 1,308 ser‐ vice‐enhanced units (579 congregate, 433 assisted living, and 296 memory care units) in the HMA. Utilizing capture rates of between 10% and 15%, depending on service level, we estimate that Corcoran could support 138 active adult units and 131 service‐enhanced units in 2016. Growth in the age‐ and income‐qualified population will outpace the delivery of new competi‐ tive senior housing units in the HMA over the next five years causing excess demand capturable in Corcoran to increase to 171 active adult units and 149 service‐enhanced units (65 congre‐ gate, 48 assisted living, and 365 memory care units) in 2021. It should be noted that our conclusions are preliminary and do not consider the quality of the specific site for a senior housing development, historical performance of other senior housing developments in the HMA, price and positioning of a potential project, or other important fac‐ tors (i.e. architectural, marketing and management issues) that would likely impact the market feasibility a development on the subject property. Service Level 20162021 Active Adult/Few Services579748 Owner‐Occupied 216351 Renter‐Occupied 363397 Service‐Enhanced Housing441758 Congregate 211311 Assisted Living 55146 Memory Care 175301 Total Units:1,0201,506 Source: Maxfield Research & Consulting, LLC 58 114 18 3247 3254 5360 85 99 20212016 143213 30 822 TABLE 32 HOUSING MARKET AREA 2016 & 2021 Total Excess Demand in the HMA Demand Capturable in Corcoran SENIOR HOUSING DEMAND SUMMARY COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 99 Introduction This section of the Study analyzes population and household growth trends and demographic characteristics of an area defined as the primary draw area, or “Market Area,” from which re‐ tail, and to a lesser extent office‐using, establishments would draw the majority of their cus‐ tomers. Certain office uses, such as medical, accounting, financial investments, insurance, legal tend to rely on the surrounding household base, while others have a client base that is more regional in character. Market Area Definition Maxfield Research and Consulting, LLC determines Market Areas for commercial space based on geographic and man‐made boundaries, commuting patterns, community orientation, places of employment, the distribution of commercial establishments, and our knowledge of the area. Due to factors such as accessibility, traffic volumes, and visibility of the area, we anticipate that the primary draw area for commercial goods and services in Corcoran will be neighborhood‐ oriented. Neighborhood centers typically have a draw area radius of one to three miles. Con‐ sidering these factors, we determined the Commercial Primary Market Area (PMA) for neigh‐ borhood retail and office space in Corcoran as the following communities: Corcoran, Green‐ field, Loretto, Maple Grove, Plymouth and Medina. The central commercial core of Corcoran, as the community expands and adds housing units, is more likely to attract establishments that will serve the local household and employment base (i.e. neighborhood shopping goods) rather than specialty goods or shopping goods categories. Retailers selling shopping goods will typically seek locations in or near larger shopping centers that provide a greater selection of stores and retail formats (i.e. Maple Grove). The shopping destinations located in the core commercial district of Maple Grove satisfy much of the demand for shopping goods from area residents. The following map illustrates Corcoran’s location in the Commercial PMA. CO M M E R C I A L M A R K E T A N A L Y S I S MA X F I E L D R E S E A R C H A N D C O N S U L T I N G 100 Pr i m a r y C o m m e r c i a l M a r k e t A r e a COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 101 Population and Household Growth Trends Table 33 presents population and household growth trends in the Commercial PMA from 2000 to 2030. The 2000 and 2010 population and household figures were obtained from the U.S. Census Bureau. The 2016 estimates and projections for 2020, 2025 and 2030 were based on estimates and forecasts made by the Metropolitan Council (the regional planning organization for the seven‐county Metro Area) and ESRI (a nationally recognized demographics firm) with adjustments made by Maxfield Research to reflect current year data. As of 2010, the Commercial PMA contained 156,744 people and 12,805 households. Be‐ tween 2000 and 2010, the population increased 13.0% (16,836) while the number of households expanded 21.0% (9,818). The pace of household growth decreased in the last few years of the 2000s as residential development activity dropped off sharply due to the recession. Housing development has gradually increased since 2010, and we estimate that the PMA’s population increased 7.2% (10,532 between 2010 and 2016, while the number of households increased 8.6% (4,834). From 2016 to 2020, the Commercial PMA is projected to add 3,899 people and 2,852 households. From 2020 to 2030, the PMA is projected to add 20,797 people (12.9%) and 6,980 households (10.9%) compared to the Twin Cities Metro Area growth of 8.4% for population and 9.4% for households over the same period. Estimate 200020102016202020252030No.Pct.No.Pct.No.Pct. Commercial PMA129,376146,212156,744160,643171,042181,44016,83613.0%14,4319.9%20,79712.9% Hennepin Co.1,116,2061,152,4251,235,5581,253,2901,290,4551,327,62036,2193.2%100,8658.8%74,3305.9% Twin Cities Metro Area*2,642,0622,849,5673,036,5893,127,6603,258,3053,388,950207,5057.9%278,0939.8%261,2908.4% Commercial PMA46,64656,46461,29864,15067,64071,1309,81821.0%7,68613.6%6,98010.9% Hennepin Co.456,131475,913509,831527,500546,590565,680 19,7824.3%51,58710.8%38,1807.2% Twin Cities Metro Area*1,021,4561,117,7491,188,4361,259,5801,319,0251,378,470 96,2939.4%141,83112.7%118,8909.4% Sources: US Census Bureau; Metropolitan Council; ESRI; Maxfiel d Research & Consulting, LLC *Includes the 7‐County Area (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties) Households 2000‐20102010‐2020Forecast Population Census 2020‐2030 Change TABLE 33 POPULATION AND HOUSEHOLD GROWTH TRENDS AND PROJECTIONS CORCORAN COMMERCIAL MARKET AREA 2000 ‐ 2030 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 102 Daytime Population Table 34 displays information on the daytime population and resident workforce population in the Market Area. People working in the Market Area who do not reside there provide a poten‐ tial supplemental commercial market for retail business establishments in the area. Maintain‐ ing and expanding the employment base in and near the commercial core of Corcoran will help support area commercial establishments. Information in the table is based on data from the U.S. Census Bureau Longitudinal Employer‐ Household Dynamics (LEHD) program for 2014, the most recent data available. Outflow reflects the number of workers living in the Market Area but employed outside that area, while inflow measures the number of workers that are employed in the area but live outside the Market Ar‐ ea. Interior flow reflects the number of workers that live and work in that Market Area. As depicted in the table, the Commercial PMA had a daytime population of 11,501 in 2014, an increase of 4.5% over the past ten years. By comparison, the daytime population in the SMA increased 20.2% from 16,846 in 2004 to 20,244 in 2014. The City of Corcoran had a daytime population of nearly 4,000 people in 2014. The Corcoran Commercial PMA and the City of Corcoran are exporters of workers, meaning that more residents leave each of these individual geographies for employment than non‐ residents commute into the areas. In 2014, the Corcoran Commercial PMA experienced a net outflow of 102,383 workers and the City of Corcoran experienced a net outflow of 2,541 workers. Change 2004201404‐'14 PMAPMAPMA Daytime Population90,818123,14335.6% Inflow74,81690,12320.5% Interior Flow16,00233,020106.3% Resident Workforce76,434135,40377.2% Outflow60,432102,38369.4% Interior Flow16,00233,020106.3% Net Job Inflow (+) or Outflow (‐)14,384‐12,260‐185.2% Live Here/Work Here Ratio1.190.91‐23.5% Sources: US Census Bureau LEHD; Maxfield Research & Consulting, LLC TABLE 34 DAYTIME POPULATION 2004 AND 2014 CORCORAN COMMERCIAL MARKET AREA COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 103 Nearly 73% of the jobs in the Corcoran Commercial PMA (90,123) were filled by workers commuting into the area in 2014, while 33,020 jobs were filled by residents of the Corcoran Commercial PMA. Inflow accounted for 91% of the jobs (1,039) in the City of Corcoran in 2014 and 100 jobs were filled by Corcoran residents. Inflow in the Corcoran Commercial PMA decreased 185.2% between 2004 and 2014. Interi‐ or flow (workers that both reside and work in the Market Area) contracted ‐23.5% in the Commercial PMA between 2004 and 2014. Despite the net outflow of workers in the Market Area, the daytime population (135,403 in the Commercial PMA and 1,139 in the City of Corcoran) contributes to retail sales in the Market Area and the community as employees at establishments located in and near the commercial core are more likely to purchase goods and services from area retailers. Busi‐ nesses that serve primarily convenience needs such as gas station/convenience stores, res‐ taurants, liquor store, drugstore, and similar types of businesses would benefit from an ex‐ panding daytime population. Consumer Expenditure Patterns Table 35 shows estimated consumer expenditures and average expenditures per households for retail goods and services in the Commercial PMA compared to the Twin Cities Metro Area in 2016, according to data obtained from ESRI based on Consumer Expenditure Surveys from the Bureau of Labor Statistics. The table shows the average expenditures per household in the Market Area and the amount spent in the Metro Area by product or service. In addition, a Spending Potential Index (SPI) is il‐ lustrated for comparison purposes. The SPI is based on households and represents the annual expenditures for a product or service relative to the national average which is given a bench‐ mark index of 100. An SPI of 115 indicates that the average annual expenditure by local con‐ sumers is 15% above the national average. In addition, the Metro Area is indexed in the table. The average expenditure reflects the average amount spent per household, while the total ex‐ penditure reflects the aggregate amount spent by all households. Consumer spending is influenced by market conditions and trends. In times of economic trou‐ bles, market conditions drive spending patterns toward convenience and necessities, whereas in times of a booming economy consumer trends feature opportunity and luxury items. Sales of luxury items and other large purchases are generally the first to falter in economic down‐ turns. Two‐thirds of the national economy is driven by consumer spending. During the most recent recession, households decreased spending, increased savings, and reduced credit card debt as many households have been faced with job losses. In essence, when the housing mar‐ ket began its decline in late 2006 into 2007, consumer spending and consumer confidence fol‐ lowed. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 104 During the recession, consumers curtailed their spending habits as credit and home equity lines diminished as available sources of cash. As the nation exited the recession, consumers gained confidence and spending gradually recovered. The Conference Board’s Consumer Confidence Index rose to its highest level in March 2017 since December 2000. An increase in consumer confidence suggests economic growth with higher consumption. The following are key points from the household expenditures table. Overall, residents are estimated to have spent approximately $427 million on retail goods and services in 2016 in the Corcoran Commercial PMA, excluding housing, finance and in‐ surance, and travel expenditures, as well as vehicle purchases. Average annual expenditures (excluding the categories mentioned above) are estimated to be $37,764 per household in the PMA. By comparison, Metro Area households spent an average of $29,238 per household in 2016. As reflected in the SPI, expenditures by Market Area households are substantially higher than the national average in every product and service category. Total average annual expenditures per household are estimated to be approximately $93,679 in the PMA and $68,744 in the Metro Area. Housing expenses accounted for ap‐ proximately 28.2% of total consumer expenditures in the PMA, compared to 27.5% in the Metro Area. Among the retail categories, Market Area spending was greatest for Food at Home (i.e. gro‐ ceries) at an average of $7,746 per household in the PMA compared to $6,004 per house‐ hold in the Metro Area. Spending was also high for Entertainment and Recreation goods and services ($3,553 per household in the PMA) and Food Away from Home ($3,826 per PMA household). The roughly 66,389 households in the PMA spent a total of $6.3 billion on consumer ex‐ penditures in 2016. With the number of households projected to grow to 72,978 by 2021, they would generate an additional $617 million in consumer expenditures annually, not fac‐ toring in inflation. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 105 Twin Cities Expenditures TotalAverageAverage Category($000's)Per HHPer HHPMATwin Cities Goods & ServicesIndexIndex Apparel & Services$218,738$3,295$2,497164124 Entertainment and Recreation$316,214$4,763$3,553163122 Nonprescription Drugs$12,799$193$146155118 Prescription Drugs$41,573$626$476149114 Eye Glasses & Contact Lenses$9,513$143$107160119 Personal Care Products$46,492$700$532161122 Child Care$50,598$762$553180131 School Books & Supplies $18,131$273$205166125 Smoking Products$35,871$540$455132111 Computer Hardware$19,317$291$221168128 Computer Software$1,434$22$17167129 Pets$56,785$855$631160118 Food IndexIndex Food at Home$514,260$7,746$6,004155120 Food Away from Home$335,113$5,048$3,826163124 Alcoholic Beverages$56,232$847$644165126 Home IndexIndex Home Mortgage Payment/Rent$1,014,502$15,281$10,597178124 Maintenance & Remodeling Services$202,785$3,054$2,112174120 Maintenance & Remodeling Materials$39,470$595$416164115 Utilities$497,585$7,495$5,776154118 Household Furnishings, Equipment, & OperationsIndexIndex Household Textiles$9,513$143$107165123 Furniture$54,590$822$617167125 Rugs$2,833$43$31175126 Major Appliances$30,958$466$337165119 Small Appliances$4,978$75$58159122 Housewares$9,095$137$103164123 Luggage$1,106$17$12180129 Telephone & Accessories$7,582$114$89160125 Lawn & Garden$44,446$669$474164116 Moving/Storage/Freight Express$6,686$101$79159125 Housekeeping Supplies$73,831$1,112$845158120 Financial & InsuranceIndexIndex Investments$913,295$13,757$9,435184126 Vehicle Loans$258,778$3,898$2,940160121 Owners & Renters Insurance$48,997$738$532159115 Vehicle Insurance$116,798$1,759$1,347157120 Life/Other Insurance$45,923$692$494167119 Health Insurance$354,780$5,344$4,008158119 TABLE 35 ESTIMATED HOUSEHOLD EXPENDITURES BY SELECTED PRODUCT TYPE CORCORAN COMMERCIAL PMA 2016 PMA Annual Expenditures Spending Potential Index to USA CONTINUED COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 106 Twin Cities Expenditures TotalAverageAverage Category($000's)Per HHPer HHPMATwin Cities TransportationIndexIndex Cars and Trucks (Net Outlay)$219,216$3,302$2,477159119 Gasoline and Motor Oil$313,622$4,724$3,637154118 Vehicle Maintenance/Repair$109,899$1,655$1,248160121 Travel IndexIndex Airline Fares$54,268$817$584179128 Lodging $54,319$818$578176125 Vehicle Rental$2,809$42$30176125 Food & Drink on Trips$50,300$758$544173124 Average Annual Household Expenditures Summary Goods & Services $827,467$11,609$8,762 Food $905,605$13,641$10,474 Home $1,754,341$26,425$18,901 Household $245,617$3,700$2,753 Financial and Insurance $1,738,571$26,188$18,755 Transportation $642,738$9,681$7,363 Travel $161,696$2,436$1,736 Total$6,276,035$93,679$68,744 Sources: ESRI; Maxfield Research & Consulting, LLC ESTIMATED HOUSEHOLD EXPENDITURES BY SELECTED PRODUCT TYPE CORCORAN COMMERCIAL PMA 2016 Spending Potential Index to USA TABLE 35 CONTINUED PMA Annual Expenditures Note: The Spending Potential Index is based on households and represents the amount spent for a product or service relative to the national average of 100. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 107 Types of Retail Goods and Customer Shopping Patterns The following describes the various types of retail goods and the manner in which customers generally shop for these goods. Because of the significant diversification of retail outlets, some of these categories overlap in certain cases. Shopping goods are those on which shoppers spend the most effort and for which they have the greatest desire to comparison shop. The trade area for shopping goods tends to be governed by the urge among shoppers to compare goods based on selection, service and price. Therefore, the size of the trade area for shopping goods is affected most by the over‐ all availability of goods in alternate locations. Some examples of shopping goods include furniture, appliances, clothing and automobiles. Convenience goods are those that consumers need immediately and frequently and are therefore purchased where it is most convenient for shoppers. Shoppers as a rule find it most convenient to buy such goods near home, near work or near a temporary residence when traveling. Examples of these types of goods include gasoline, fast food, liquor, grocer‐ ies, pharmaceuticals, health and beauty aids, among others. Specialty goods are those on which shoppers spend more effort to purchase. Such mer‐ chandise has no clear trade area because customers will go out of their way to find specialty items wherever they are sold. By definition, comparison shopping for specialty goods is much less significant than for shopping goods. Examples of these include gift shops, florists, pet stores, art gallery, antiques, home furnishings, textiles (needlework and fabrics), art supplies, books. The home furnishings segment has some overlap between shopping goods and specialty goods. Impulse goods are those that shoppers do not actively or consciously seek. In stores, im‐ pulse goods are positioned near entrances or exits or in carefully considered relationships to shopping goods. Examples of these types of goods are: candy and drinks at a dry clean‐ ing establishment, candy or small novelty items near the cash register at a gift shop, acces‐ sories or jewelry at the counter in a clothing store. These may be located within existing stores, but would not be a separate establishment. Retail properties can generally be classified into five major categories, as described below. Community Center: Community Centers are greater than 100,000 square feet and have at least two anchor tenants which may include a general merchandise store in addition to a supermarket or drug store. Limited small shop space is occupied by a mix of service‐ oriented tenants and soft‐goods retailers. This classification also includes power centers which are built around large format category killers such as electronic, home improvement and sporting goods stores. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 108 Neighborhood Center: Neighborhood centers are usually anchored by a grocery store or a drug store. This type of center fulfills the day‐to‐day needs of the surrounding neighbor‐ hood, is located at major street intersections, and is roughly 30,000 to 100,000 square feet. Regional Center: A regional center is a major shopping area generally with two or more an‐ chor department stores and a variety of additional shops. These centers draw customers from a broad geographical area. Specialty Center: Specialty centers are unanchored and have a theme or specialty tenants with a different character than the other center types. These centers are not located in CBD’s and they may be a part of a larger, community center development. Central Business District: Centers located in the Central Business District (CBD) of Minneap‐ olis and St. Paul. This includes space located on the skyway or street fronts. To properly re‐ flect the status of these submarkets, some of these centers may be smaller than 20,000 square feet due to the smaller size and scope of this market. Outlet Mall: Outlet malls are located along major freeways within a 100‐mile radius of the Twin Cities in the outer suburbs or Outstate Minnesota. Tenants are typically large retailers or manufacturers that use these locations to sell directly to consumers. Outlet malls have traditionally been designed to appeal to the value‐conscious shopper who wants brand‐ name merchandise at off‐retail prices. Visibility and access are primary considerations for retailers seeking a location. Several factors are taken into consideration based on traffic counts and visibility when retailers select a site, in‐ cluding: daily traffic volumes in the area; proximity to public transportation; accessibility for po‐ tential customers as well as delivery vehicles; visibility of the store and business signage from surrounding road network; and, the sites proximity to other traffic generators. Neighborhood centers generally draw customers from a distance of one and one‐half to three miles, while community centers draw from a larger area (i.e. three to six miles). Regional Malls generally draw from a five‐ to 15‐mile radius, while Super‐Regional Malls have a trade area up to 25 miles in size. Specialized‐purpose centers, such as Outlet Malls, have larger trade areas in the 25‐ to 75‐mile range. Convenience/strip centers generally have trade areas of less than one mile. Generally, a neighborhood center will be situated with direct access to a collector street and community centers typically have access to major thoroughfares and principal arterial road‐ ways. County Road 10 is classified as a minor arterial roadway as is County Road 116. Minor arterial roadways generally serve less concentrated traffic volumes than principal arterials (i.e. Highways 42 and 52), such as neighborhood shopping centers and schools. The most likely re‐ tail uses to be drawn to sites in Corcoran during the initial stages will be small grocery store or food market, drugstore, small eating and drinking establishments, liquor store, pet store, child care, etc. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 109 Twin Cities Retail Market Conditions Maxfield Research analyzed secondary data regarding retail market trends for the Twin Cities Metro Area, including total rentable area, vacancy rates, and absorption. This information is useful in assessing the potential to develop retail uses near the intersection of County Roads 10 and 116 in Corcoran as the overall health of the local retail market will influence future devel‐ opment in the community. The data includes information for multi‐tenant retail buildings greater than 20,000 square feet in size. The table on the following page shows the growth of retail space and changes in vacan‐ cy in the various retail center types. Data in Table 36 is provided by Colliers International for the fourth quarters of 2015 and 2016. Maxfield Research also referenced market information provided by Cushman & Wakefield|NorthMarq for this analysis. Colliers International is tracking 67.8 million square feet of retail space in the Twin Cities Metro Area. As depicted in the following graph, neighborhood center space comprises the greatest proportion of retail space in the Metro Area with 29.5 million square feet (44% of the total). Regional centers represent 28% of the Twin Cities retail inventory (18.8 million square feet), while roughly 26% of the retail space is situated in community shopping centers (17.7 mil‐ lion square feet). Minneapolis Central Business District (980,000 square feet) and outlet malls (839,000 square feet) each represent roughly 1% of the supply of retail space in the Twin Cities. As of the fourth quarter of 2016, there were 3.86 million square feet of retail space vacant in the Twin Cities, representing a vacancy rate of 5.7%, up from fourth quarter of 2015 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 110 when the vacancy rate was 4.4%. Fourth quarter store closings accounted for most of the negative absorption, although grocery stores mitigated some of the store closings. In the Twin Cities, retail vacancy was highest in the Minneapolis Central Business District (11.8%), followed by neighborhood centers (5.8%). Community centers were 4.9% vacant and regional centers had a 1.6% vacancy rate while outlet malls were fully‐occupied. Submarket/ Shopping Center Total Rentable SF Direct Vacant SF Vacancy Rate YTD Absorption Minneapolis CBD980,041168,52617.2%‐50,039 Northeast12,159,836550,6744.5%‐98,615 Southeast18,337,2661,145,1236.2%211,744 Northwest19,410,8571,069,9115.5%196,100 Community Ctr5,707,514379,9016.7%63,313 Neighorhood Ctr9,372,974629,9546.7%99,681 Outlet Mall430,00000.0%0 Regional Ctr3,900,36960,0561.5%33,106 Southwest16,127,071892,5105.5%‐7,311 Total Market67,015,0713,826,7445.7%251,879 Community Ctr18,082,571998,6675.5%282,726 Neighorhood Ctr28,398,9752,129,8137.5%203,389 Outlet Mall839,00000.0%0 Regional Ctr18,764,327529,7382.8%‐184,197 Submarket/ Shopping Center Total Rentable SF Direct Vacant SF Vacancy Rate YTD Absorption Minneapolis CBD980,041170,12617.4%‐8,311 Northeast11,276,427361,0403.2%430,745 Southeast17,450,334759,2874.4%185,498 Northwest19,673,821974,9645.0%151,956 Community Ctr6,410,751406,1676.3%12,043 Neighorhood Ctr8,275,399480,1675.8%75,484 Outlet Mall430,00000.0%0 Regional Ctr4,557,67188,6301.9%64,429 Southwest14,944,970500,3903.3%116,577 Total Market64,325,5932,765,8074.3%876,465 Community Ctr17,913,628749,8644.2%198,855 Neighorhood Ctr25,132,2061,529,1696.1%584,774 Outlet Mall839,00000.0%0 Regional Ctr19,460,718316,6481.6%101,147 Sources: Colliers International; Maxfield Research & Consulting, LLC 3rd Quarter 2015 TABLE 36 RETAIL MARKET STATISTICS TWIN CITIES 3rd Quarter 2015 and 4th Quarter 2016 4th Quarter 2016 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 111 Total absorption of retail space for 2016 was 251,879 square feet after negative absorption in the 4th quarter. Retail demand continues to be highest in neighborhood centers, which experienced nearly 218,000 square feet of absorption during that time period. Over the past 12 months, neighborhood centers experienced a ‐0.8% drop in vacancy. Roughly 36,000 square feet of regional center space was absorbed through the first half of 2016, while community centers experienced ‐10,927 square feet of negative absorption. As illustrated in the following graph, the Twin Cities Retail Market was improving from high vacancy rates and weak demand during the Recession. Vacancy rates decreased between 2010 and 2015, but recently increased again modestly in 2016. Absorption continues to be positive, but 2016 year‐end absorption was down significantly from 2015, primarily due to year‐end store closings. Market conditions have become very competitive and retailers are faced with a shortage of available quality space and rising rental rates. Development activity primarily in the grocery sector has been increasing in response to in‐ creased demand. According to Cushman & Wakefield|NorthMarq approximately 923,000 square feet of new space was delivered in 2015, and there is nearly 1.2 million square feet of retail space under construction in for delivery in 2016. As retailers compete for a declining supply of available space, rental rates are being pushed higher. Newer small‐shop space in the prime market areas are achieving rents in the $60 per square foot range, which represents a new benchmark high for the Twin Cities. Exam‐ ples of a prime location include France Avenue in Edina, Grand Avenue in Saint Paul, and Radio Drive in Woodbury. These rents are pricing some retailers out of those markets and forcing them to seek space in secondary locations COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 112 In the Northwest submarket, an estimated 9.4 million square feet is in neighborhood cen‐ ters, 6.7% of which was vacant (629,954 square feet) as of year‐end 2016. Neighborhood centers in the Northwest submarket had 99,981 square feet of absorption in 2016. Much of the neighborhood center leasing activity is occurring in small‐shop space, predom‐ inantly driven by fast‐casual food concepts, hair‐care service providers, cellular retailers, and fitness centers. Additionally, grocery stores have been very active in expanding or seeking neighborhood center space, including; Hy‐Vee (site grading underway south of County Road 10 on High‐ way 101), Jerry’s Foods, Fresh Thyme, Trader Joe’s, Aldi, Lunds & Byerly’s, Kowalski’s Mar‐ kets, and Whole Foods. Average rental rates in neighborhood centers increased roughly 1.3% over the first nine months of 2016 to $16.25 per square foot net. However, new specialty centers in prime lo‐ cations are obtaining much higher rents in the $40 to $60 per square foot range, while cen‐ ters in secondary locations generally have rental rates less than $20 per square foot. Shopping Center 2016 Q3 2015 Q4 2014 Q42013 Q4 Minneapolis CBD $24.66$24.14$24.19$27.65 Community Center $18.87$18.92$18.64$18.66 Neighborhood Center $16.25$16.04$15.87$15.72 Outlet Mall $33.74$33.74$33.74‐‐ Regional Center $62.99$62.99$62.68$63.06 Total Market $27.54$27.48$27.55$27.60 TABLE 37 QUOTED AVERAGE NET RETAIL RENTAL RATES TWIN CITIES METRO AREA 2013 ‐ 2016 Sources: Cushman & Wakefield|NorthMarq; Maxfield Research & Consulting, LLC COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 113 Selected Retail Properties in the Commercial Market Area The following table shows selected retail space currently listed as available for lease in the Cor‐ coran Commercial PMA. The data is provided to show the types and amount of space available along with pricing and shopping center type. Data was collected by Maxfield Research and Consulting, LLC from the Xceligent Commercial Property Exchange. Maxfield Research identified 24 retail spaces currently listed for lease in the Commercial Market Area. Combined, buildings have 2,027,361 square feet of space with 352,435 square feet available for lease. As illustrated in the following graph, these properties are generally concentrated in Maple Grove and Plymouth where there are high concentrations of retail space in the Commercial PMA. ‐ Maple Grove contains 244,523 square feet of available space (69% of the Market Area’s available space). ‐ Plymouth has 86,225 square feet of space available (24.5% of the Market Area’s availa‐ ble space). ‐ Medina has 18,403 square feet of space (5% of the available retail space in the Market Area), in two properties. ‐ Loretto has 3,284 square feet of space available (1%) in one property. ‐ No available space was identified in the following communities: Corcoran and Green‐ field. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 114 Building Location Year Built Bldg Size/ SF Available Taxes/ SF Op. Exp/Center Type Maple Ridge Center200527,425Negotiable$3.97$7.57Conv/Strip Ctr 9650 63rd Avenue North1,292 Waterford Park Plaza198949,270Negotiable$4.52$8.50Anchored Strip Ctr. 10100‐10200 N. 6th Avenue3,395 Grove Square Plaza198929,613$18.00‐$18.00$4.58$4.07Conv./Strip Ctr. 13574 80th Circle4,822 Rice Lake Plaza198641,862$25.00‐$25.00$4.91$4.40Conv/Strip Ctr. 13700‐13770 83rd Way N.1,254NNN Rockford Square198815,854$25.00‐$25.00$6.36$6.31Conv. Strip Ctr. 4000 N. Annapolis Lane4,362 11540 Bass Lake Road19686,821$15.64‐$17.61‐‐‐‐Conv/Strip Ctr 11540 Bass Lake Road1,151 Clydesdale Marketplace200627,163$6.28$3.82Anchored Strip Ctr. 302‐318 Clydesdale Trail14,577 Shoppes at Dunkirk200022,720$20.00‐$23.00$5.23$3.03Conv/Strip Ctr. 16300 County Road 301,814 Oakwood Square Building19875,220$10.00‐$12.00$5.37$4.03Conv/Strip Ctr 17405 County Road 6860 Village at Arbor Lakes201748,295$30.00‐$40.00n/an/aNeighborhood Ctr. 12055 Elm Creek Blvd. N.7,464 Village at Arbor Lakes201743,860$30.00‐$43.00n/an/aNeighborhood Ctr. 12225 Elm Creek Blvd. N.7,058 Shoppes at Arbor Lakes200355,603‐‐‐‐Neighborhood Ctr. 12289 Elm Creek Blvd. N.6,757 Shoppes at Arbor Lakes200353,074‐‐‐‐Neighborhood Ctr. 12403 Elm Creek Blvd. N.3,620 Shoppes at Arbor Lakes200352,857‐‐‐‐Neighborhood Ctr. 12483 Elm Creek Blvd. N.1,088 Arbor Lakes Retail Center199978,512$3.34‐‐Neighborhood Ctr. 12530‐12550 Elm Creek Blvd. N.32,572 Fountains at Arbor Lakes20068,509$1.60‐‐General 11627 Fountain Dr.2,680 Fountains at Arbor Lakes200629,074‐‐‐‐General 11650‐11668 Fountains Dr.2,439 The Grove20074,937Negotiable$5.15$5.12Conv/Strip Ctr 15501‐15511 Grove Cir. N.2,948 The Grove20078,593Negotiable$5.15$5.12Conv./Strip Ctr. 15601‐15611 Grove Cir. N.3,010 The Grove20078,341$21.00‐$25.00$5.15$5.12Conv/Strip Ctr. 15615‐15641 Grove Cir. N.3,560 Grove Square Center1985/168,635$20.00‐$23.00$4.20$3.53Community Ctr. 13599‐13777 Grove Drive2003R7,675NNN Grove Shops198616,907$20.00‐$23.00$4.14$2.81Conv/Strip Ctr. 13680 Grove Drive1,225 Arbor Lakes‐ Bldg. 16200148,640$24.00‐$26.00$7.43$4.81Mixed Use 7876‐7886 Main Street3,586 Sources: Xceligent; Maxfield Research & Consulting, LLC NNN NNN Net Negotiable Negotiable Negotiable Negotiable Negotiable Negotiable NNN NNN PRIMARY MARKET AREA TABLE 38 RETAIL SPACES AVAILABLE FOR LEASE December 2016 CORCORAN COMMERCIAL MARKET AREA Lease Rates/ Lease Type Net Net Net Gross Negotiable Net NNN NNN COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 115 The largest blocks of available space in the Commercial Market Area are 55,000 square feet located in a freestanding big box space in The Grove shopping center and 32,572 square feet of space located at Arbor Lakes Retail Center, which is a neighborhood center, built in 1999. The space available is the former Sports Authority big box space as Sports Authority closed its outlets here in the Twin Cities recently. Most of the retail listings in the Commercial PMA are split between Maple Grove and Plym‐ outh, which have the largest amount of existing retail space and are the two largest com‐ munities in the Commercial PMA. Among the properties surveyed, there is a total of 88,610 square feet available in neighbor‐ hood centers, 17,118 square feet available in community centers, 56,261 in freestanding buildings, 21,139 in special use spaces (i.e. restaurant, fitness, automotive), 33,586 in mixed use and 135,721 in convenience strip and anchored strip centers. Only 16% of the available retail space (56,261 square feet) is classified as freestanding or a freestanding big box. Generally, the spaces that are available in the Commercial PMA range in size from 1,000 to about 5,000 square feet, typical sizes for smaller in‐line retailers. Retail buildings in the Commercial Market Area average 40,547 square feet in size. The average net rent across the properties that are available for lease is $23.68 per square foot across 19 properties. The low quoted lease rate is $0.30 net per square foot for a res‐ taurant space to a high of $43.00 per square foot at the new Village at Arbor Lakes which is under construction. More than half of the properties that are listed (50 total) indicate that the lease rate is negotiable. Commercial leases are generally net leases. In addition to the base rent for occupancy, net leases (also commonly referred to as triple‐net or NNN leases) require that the lessee also pays maintenance and operating expenses such as taxes, insurance, utilities, and repairs. Tenants in these net lease retail properties pay an average of $9.71 per square foot for tax and operating expenses along with the base rent for the space. Operating expenses aver‐ age $4.87 per square foot and taxes average $4.84 per square foot. Village at Arbor Lakes is currently under construction in Maple Grove and the first two retail buildings are being marketed. In addition, a new Hy‐Vee grocery store is planned for the in‐ tersection of Highway 101 and Co. Road 10 in Plymouth. While the new Hy‐Vee store will be the first tenant to occupy space, it is anticipated that additional retails will co‐locate on the property adjacent to the new Hy‐Vee. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 116 Retail Demand Potential and Leakage Table 39 on the following page presents current retail sales and consumer expenditure data for the Corcoran Commercial PMA. The sales information is from ESRI based on household counts. This information lists retail demand (potential sales), retail supply to consumers (retail sales) and provides a picture of the gap between the area’s retail supply and demand. A positive val‐ ue represents “leakage” of retail opportunity to stores outside of the Market Area. A negative value represents a “surplus,” where more customers are coming into the area for retail goods and services than there are households in the area. As depicted in the table and illustrated in the following graph, most of the major retail cate‐ gories experienced leakage of retail sales during 2016 in the PMA, despite the large concen‐ trations of retail in Maple Grove and Plymouth. Market Area residents are purchasing retail goods and services at establishments located outside the area, generating “leakage” of re‐ tail opportunity outside the Market Area. This data indicates that some retailers considering the Market Area could potentially cap‐ ture a portion of sales that are currently being transacted outside of the Market Area, in‐ cluding several categories that would likely be located in a neighborhood‐ or specialty‐ oriented retail setting, including: grocery stores; health and personal care stores; auto parts; clothing and clothing accessories, sporting goods, and restaurants (full‐service and limited‐service). COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 117 DemandSupplyRetail Gap Surplus/LeakageNumber of Industry Group (NAICS Code)(Retail Potential)(Retail Sales)(Demand ‐ Supply)FactorBusinesses Total Retail Trade and Food & Drink (NAICS 44‐45, 722)$19,239,165,423$14,028,228,952$5,210,936,47115.71,047 Total Retail Trade (NAICS 44‐45)$17,333,981,790$12,732,115,636$4,601,866,15415.3794 Total Food & Drink (NAICS 722)$1,905,183,633$1,296,113,316$609,070,31719.0253 Motor Vehicle & Parts Dealers$4,002,758,092$1,210,320,028$2,792,438,06453.651 Automobile Dealers $3,226,837,814$1,035,087,671$2,191,750,14351.420 Other Motor Vehicle Dealers $512,573,512$58,647,733$453,925,77979.58 Auto Parts, Accessories & Tire Stores $263,346,766$116,584,624$146,762,14238.623 Furniture & Home Furnishings Stores$493,219,901$477,130,533$16,089,3681.753 Furniture Stores $324,571,452$270,775,754$53,795,6989.023 Home Furnishings Stores $168,648,449$206,354,780 ($37,706,331)(10.1)30 Electronics & Appliance Stores$809,031,246$1,711,302,644 ($902,271,397)(35.8)105 Bldg Materials, Garden Equip. & Supply Stores$940,738,080$1,107,777,187 ($167,039,107)(8.2)96 Bldg Material & Supplies Dealers $772,768,751$1,067,421,872 ($294,653,121)(16.0)82 Lawn & Garden Equip & Supply Stores$167,969,329$40,355,316$127,614,01461.314 Food & Beverage Stores$2,918,154,722$1,726,606,268$1,191,548,45425.771 Grocery Stores $2,458,913,385$1,459,898,127$999,015,25825.526 Specialty Food Stores $169,902,123$60,910,162$108,991,96047.217 Beer, Wine & Liquor Stores$289,339,214$205,797,978$83,541,23616.928 Health & Personal Care Stores$1,132,775,192$903,331,679$229,443,51311.368 Gasoline Stations$1,245,868,489$618,483,419$627,385,07033.734 Clothing & Clothing Accessories Stores$734,482,150$777,455,426 ($42,973,276)(2.8)104 Clothing Stores $566,663,741$604,728,503 ($38,064,761)(3.2)74 Shoe Stores $114,277,600$86,267,192$28,010,40814.012 Jewelry, Luggage & Leather Goods Stores$53,540,808$86,459,731 ($32,918,923)(23.5)18 Sporting Goods, Hobby, Book & Music Stores$549,814,910$493,585,170$56,229,7405.459 Sporting Goods/Hobby/Musical Instr Stores$457,428,591$449,873,136$7,555,4550.852 Book, Periodical & Music Stores $92,386,319$43,712,034$48,674,28635.87 General Merchandise Stores$3,396,468,879$2,745,328,613$651,140,26610.634 Department Stores Excluding Leased Depts.$2,760,257,981$1,395,208,424$1,365,049,55732.811 Other General Merchandise Stores $636,210,898$1,350,120,189 ($713,909,291)(35.9)23 Miscellaneous Store Retailers$712,752,900$731,513,012 ($18,760,113)(1.3)94 Florists $31,232,137$80,204,707 ($48,972,570)(43.9)11 Office Supplies, Stationary & Gift Stores $106,924,275$101,648,515$5,275,7612.527 Used Merchandise Stores $89,006,308$21,873,182$67,133,12760.512 Other Miscellaneous Store Retailers $485,590,179$527,786,610 ($42,196,431)(4.2)44 Nonstore Retailers$397,917,230$229,281,658$168,635,57226.925 Electronic Shopping & Mail‐Order Houses $319,882,142$142,739,005$177,143,13638.313 Vending Machine Operators $20,593,535$41,474,786 ($20,881,251)(33.6)8 Direct Selling Establishments $57,441,553$45,067,866$12,373,68712.14 Food Services & Drinking Places$1,905,183,633$1,296,113,316$609,070,31719.0253 Full‐Service Restaurants$1,088,731,867$696,556,126$392,175,74122.0133 Limited‐Service Eating Places $714,971,330$529,223,997$185,747,33314.9103 Special Food Services $45,988,755$46,930,536 ($941,781)(1.0)9 Drinking Places ‐ Alcoholic Beverages $55,491,681$23,402,657 $32,089,02440.78 Sources: ESRI; Maxfield Research & Consulting, LLC SUMMARY EXPENDITURE TYPE Note: All figures quoted in 2016 dollars. Supply (retail sales ) estimates sales to consumers by establishments, sales to busines ses are excluded. Demand (retail potential) estimates the expected amout spent by consumers at a retail establishment. Leakage/Surplus factor measures the relationship between supply and demand at ranges from +100 (total leakage) to ‐100 (total surplus). A positive value represents "leakage" of retail opportunity outside the trade area. A negative value represents a surplus of retail sales, a market where customers are drawn in from outside the trade area. TABLE 39 RETAIL DEMAND POTENTIAL AND LEAKAGE CORCORAN COMMERCIAL PMA 2016 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 118 It is unlikely, however that residents in the Market Area are traveling far to purchase goods and services, as there are major retail concentrations located in and just outside of the Market Area. The graph below shows the retail leakage by major retail category for the City of Corcoran as of 2016. As shown, all retail categories experienced leakage. Those with the lowest leakage are those where Corcoran already has retail outlets which are servicing a portion of retail expenditures in that category. Table 40 shows retail surplus and leakage for the individual retail categories. The table shows that Corcoran experienced a retail leakage rate of 51% of retail sales outside of the community. Total food and drink retail sales experienced a leakage rate of 76.6% as of 2016. The significantly high leakage rates indicate potential retail sales opportunities to capture a por‐ tion of retail sales in a number of categories that are currently being transacted outside of the community. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 119 DemandSupplyRetail Gap Surplus/LeakageNumber of Industry Group (NAICS Code)(Retail Potential)(Retail Sales)(Dem and ‐ Supply)FactorBusinesses Total Retail Trade and Food & Drink (NAICS 44‐45, 722)$7,750,84 8$2,514,131$5,236,71851.029 Total Retail Trade (NAICS 44‐45)$7,017,701$2,416,983$4,600,71848.825 Total Food & Drink (NAICS 722)$733,147$97,148$635,99976.64 Motor Vehicle & Parts Dealers$1,581,886$1,197,454$384,43313.88 Automobile Dealers $1,290,467$669,623$620,84531.74 Other Motor Vehicle Dealers $183,808$252,890 ($69,081)(15.8)1 Auto Parts, Accessories & Tire Stores $107,611$274,941 ($167,331)(43.7)3 Furniture & Home Furnishings Stores$205,878$26,899$178,97976.91 Furniture Stores $124,180$0$124,180100.00 Home Furnishings Stores $81,698$26,899 $54,79950.51 Electronics & Appliance Stores$403,592$244,051$159,54124.62 Bldg Materials, Garden Equip. & Supply Stores$498,304$186,601$311,70345.55 Bldg Material & Supplies Dealers $442,579$53,903$388,67678.31 Lawn & Garden Equip & Supply Stores$55,725$132,698 ($76,973)(40.9)4 Food & Beverage Stores$1,115,718$89,518$1,026,20085.12 Grocery Stores $917,299$0$917,299100.00 Specialty Food Stores $76,221$40,453 $35,76830.71 Beer, Wine & Liquor Stores$122,198$49,064 $73,13342.71 Health & Personal Care Stores$455,437$0$455,437100.00 Gasoline Stations$462,786$298,126$164,66021.61 Clothing & Clothing Accessories Stores$331,515$0$331,515100.00 Clothing Stores $226,762$0$226,762100.00 Shoe Stores $44,159$0 $44,159100.00 Jewelry, Luggage & Leather Goods Stores$60,594$0 $60,594100.00 Sporting Goods, Hobby, Book & Music Stores$197,999$20,584$177,41481.21 Sporting Goods/Hobby/Musical Instr Stores$170,215$20,584$149,63178.41 Book, Periodical & Music Stores $27,783$0 $27,783100.00 General Merchandise Stores$1,323,200$66,814$1,256,38790.41 Department Stores Excluding Leased Depts.$1,037,411$0$1,037,411100.00 Other General Merchandise Stores $285,789$66,814$218,97662.11 Miscellaneous Store Retailers$304,231$179,024$125,20725.93 Florists $15,280$22,919 ($7,638)(20.0)1 Office Supplies, Stationary & Gift Stores $52,044$0 $52,044100.00 Used Merchandise Stores $31,755$0 $31,755100.00 Other Miscellaneous Store Retailers $205,152$156,106 $49,04613.62 Nonstore Retailers$137,154$107,912$29,24111.91 Electronic Shopping & Mail‐Order Houses $93,619$107,912 ($14,294)(7.1)1 Vending Machine Operators $5,862$0$5,862100.00 Direct Selling Establishments $37,673$0 $37,673100.00 Food Services & Drinking Places$733,147$97,148$635,99976.64 Full‐Service Restaurants$19,831$0 $19,831100.00 Limited‐Service Eating Places $43,653$30,384 $13,26917.92 Special Food Services $669,663$66,764$602,89982.02 Drinking Places ‐ Alcoholic Beverages $0$0$00.00 Sources: ESRI; Maxfield Research & Consulting, LLC SUMMARY EXPENDITURE TYPE Note: All figures quoted in 2016 dollars. Supply (retail sales ) estimates sales to consumers by establishments, sales to busines ses are excluded. Demand (retail potential) estimates the expected amout spent by consumers at a retail establishment. Leakage/Surpl us factor measures the relationship between supply and demand at ranges from +100 (total leakage) to ‐100 (total surplus). A positive value represents "leakage" of retail opportunity outside the trade area. A nega tive value represents a surplus of retail sales, a market where customers are drawn in from outside the trade area. TABLE 40 RETAIL DEMAND POTENTIAL AND LEAKAGE CITY OF CORCORAN 2016 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 120 Retail Development Potential Demand for additional retail space, measured in gross leasable space in square feet, is calculat‐ ed in the tables on the following pages which combine demand information with supply to cal‐ culate the amount of retail space supportable in the Commercial PMA. Sources of data used in the calculations include the Metropolitan Council and Maxfield Research and Consulting, LLC (household growth trends), ESRI (consumer expenditure), and the Urban Land Institute (sales per square foot). The demand calculation begins with household growth projections combined with an estimate of the total expenditures for retail goods and services by Market Area residents, excluding ex‐ penditures for automobiles, homes, finance and insurance, education, and travel. We antici‐ pate that the primary source of demand for new retail space in the commercial core of Corco‐ ran will be generated by household and consumer expenditure growth in the Market Area. Ta‐ ble 41 calculates demand for neighborhood retail space in in the Commercial PMA, while Table 42 calculates neighborhood retail space for the City of Corcoran only. The following points summarize the retail demand methodology. As of 2016, there are an estimated 61,298 households in the Commercial PMA and 1,925 households in the City of Corcoran. The household base is projected to grow by 2,852 households in the Commercial PMA between 2016 and 2020, and by 575 households in the City of Corcoran between 2016 and 2020. Between 2020 and 2030, the Commercial PMA is projected to increase by 6,980 households and the City of Corcoran is projected to increase by 1,070 households. Based on a review of consumer expenditure patterns, PMA residents are estimated to have spent an average of $37,765 on retail goods and services in 2016. In the City of Corcoran, the average annual retail expenditure on goods and services is estimated at $36,259. Because of growth in the household base and accounting for inflation, as well as projected increases in household income, Commercial PMA residents are expected to increase their overall retail expenditures from an estimated $2.5 billion in 2016 to nearly $3.9 billion by 2030. Projected increases in households and annual expenditures will result in growth in retail expenditures by Commercial PMA residents of roughly $1.4 billion between 2016 and 2030. Similarly, growth in the household base in Corcoran is projected to generate another $111 million in retail expenditures between 2016 and 2030. As of 2016, total leakage of retail expenditures (including food and drink) from the Com‐ mercial PMA was estimated to be 15% and 51% for the City of Corcoran, indicating some loss of potential retail sales in the Commercial PMA, but a substantial loss of retail sales in Corcoran. Most Corcoran residents currently travel to other locations for most of their weekly and monthly shopping excursions, whether to Maple Grove, Plymouth or outside of these areas. New neighborhood retail is currently planned for the intersection of Highway COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 121 101 and Co. Road 10. However, there is a limited amount of retail at the intersection of Co. Road 10 and Co. Road 116. Traffic is anticipated to increase at this intersection as new de‐ velopment occurs and Corcoran builds out at higher density levels. Deducting leakage from total PMA expenditures results in purchasing power that will be retained in the PMA. Accounting for inflation, we anticipate that the average retail sales per square foot will in‐ crease from an estimated $297 in 2016 to $318 in 2020 and $347 in 2030. Average retail sales per square foot in Corcoran would increase from $265 in 2016 to $310 in 2030. The retail sales per square foot reflects an average across neighborhood shopping centers in the Midwest and is based on information published in the “Dollars & Cents of Shopping Cen‐ ters” prepared by the International Council of Shopping Centers and the Urban Land Insti‐ tute. Dividing purchasing power by average retail sales per square foot equates to total demand for 7.2 million square feet of retail space in the Commercial PMA in 2016, increasing to 7.6 million square feet in 2020 and 9.4 million square feet in 2030, for a net gain of 2.2 million square feet from 2016 to 2030. Dividing purchasing power by average retail sales per square foot equates to total demand for 109,116 square feet of retail space in Corcoran in 2016, increasing to 145,989 square feet in 2020 and 211,045 square feet in 2030, for a net gain of 101,930 square feet from 2016 to 2030. We estimate that the City of Corcoran could capture between 25% and 40% of the total growth in retail demand in its community, resulting in demand from Corcoran households for an estimated 25,500 to 41,000 square feet of neighborhood retail space that would lo‐ cate in or near the core commercial area between 2016 and 2030. Retailers could also cap‐ ture potential sales from employees working at businesses establishments in the area, as well as from the daily commuting traffic along Co. Road 116. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 123 Office‐Using Business Growth by Type of Business The following table presents the distribution of businesses that are typical users of office space by number of employees in the Corcoran Commercial PMA in the years 2000 and 2014, the most recent data available. The data is extracted from the Business Register, a database of all known employer companies which is maintained and updated by the U.S. Census Bureau and is accumulated based on ZIP Code boundaries. For this analysis, we used the following Zip Codes which approximate the Commercial PMA. Growth in these sectors is an important indicator of total demand for office space and the size of businesses provides an indication of the type and sizes of office spaces required. In addition to businesses in these sectors, a small amount of office demand will be generated from other sectors, including government agencies. The office‐using business categories include Information; Finance and Insurance; Real Es‐ tate; Professional, Scientific, and Technical Services; Management of Companies and Enter‐ prises; Education; and, Health Care and Social Assistance. The number of businesses in these categories in the Corcoran Commercial PMA expanded from 1,187 businesses in 2000 to 1,650 businesses in 2014, a 39% increase. Real EstateProfessionalMgmt ofHealth Care Finance && RentalScientific &Companies& Social # of Employees InformationInsurance& LeasingTech. Services& EnterprisesEducati onAssistance No.Pct. 1 to 43811612644113247082869.8 5 to 96301461724616614.0 10 to 1981316343416947.9 20 to 491136176620695.8 50 to 995415204211.8 100 to 249010410060.5 250 or more010110030.3 Total5817816356333361561,187 100.0 1 to 435186199611832101117271.0 5 to 97392060393917710.7 10 to 19829154458361458.8 20 to 4971762191026965.8 50 to 9937164310342.1 100 to 2490427214201.2 250 or more100310160.4 Total6128224375232632171,650 100.0 Note: Includes the following Zip Codes: 55340, 55446, 55391, 55311, 55447, 55374, 55357. Sources: Bureau of the Census, County Business Patterns; Maxfi eld Research & Consulting, LLC 2014 TABLE 43 OFFICE‐USING BUSINESSES BY INDUSTRY AND SIZE OF BUSINESS CORCORAN COMMERCIAL PMA 2000 and 2014 Total 2000 ‐‐‐‐‐‐‐‐‐ Industry Description ‐‐‐‐‐‐‐‐‐‐ COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 124 There were 752 (46%) establishments in the Professional, Scientific, and Technical Services industry. The Health Care and Social Assistance industry (includes child day care, dentists, chiropractors and other medical doctors) comprised 217 businesses (13%). The Finance and Insurance sector had 282 businesses (17%) and there were 243 and 63 businesses in the Re‐ al Estate (15%) and Education (4%) sectors, respectively. The Information and Management of Companies and Enterprises sectors represented smaller proportions of office‐using busi‐ nesses in the area, at 4% and 2%, respectively The Professional, Scientific, and Technical Services industry maintains the largest presence of office‐using business establishments in the area, and it experienced the largest growth between 2000 and 2014, gaining 189 businesses (34%). This sector comprises establish‐ ments that specialize in performing professional, scientific, and technical activities for cli‐ ents in a variety of industries as well as for households. Services performed include: legal representation; accounting and payroll; architectural, engineering, and design; computer; consulting; research; advertising; photographic; translation and interpretation; and, veteri‐ nary. Household growth in the surrounding market area will likely stimulate additional de‐ mand for services from businesses in this sector. Expansion also occurred in the Health Care and Social Assistance sector which gained 61 businesses (40%), the Finance and Insurance sector (104 businesses for a 58% increase). Based on the distribution of businesses by employee size range, we estimate that these 1,650 business establishments employ an approximate 15,737 workers in the area. As de‐ picted in the following graph, businesses with 100+ workers would employ approximately 38% of the workers in the area (5,980 employees). COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 125 Of the office‐using businesses in the area, 71% had fewer than five employees (1,172 busi‐ nesses), 11% had between five and nine workers (177), 9% had between 10 and 19 workers (145), and 6% had 20 to 49 workers (96). Based on this information, it appears that the majority of office users in the area are likely to require smaller spaces. Assuming that office employees occupy an average of 180 square feet of office space, many companies in the area would need less than 1,000 square feet, and only 16% of the business establishments would need more than 1,800 square feet. It should be noted that many of these small business establishments are likely to be located in home offices. The chart on the following page shows an estimate of the total amount of office space needed to accommodate the businesses listed in the table by size of business in 2014 com‐ pared to 2000. The figures assume that employees occupied an average of 200 square feet of office space (including common areas) in 2000 and 180 square feet in 2014. According to various commercial real estate industry sources (i.e. CoreNet Global and NAIOP), office space utilization has dropped steadily over the past decade as office users have attempted to gain efficiencies by increasing the amount of collaborative meeting space and shrinking the square footage allocated to individual work spaces. The chart shows that about 162,240 square feet was needed to accommodate all of the businesses in 2014. However, 126 companies (72% of the total) in the area would require less than 900 square feet of space and many of these businesses with between one and four employees are likely operated from private homes, thereby reducing total office needs to about 136,400 square feet. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 126 Approximately 20 (11%) businesses would need between 900 and 1,800 square feet of space and 22 (13%) would need 1,800 to 3,600 square feet. We estimate that a total of 69,000 square feet of office space was needed in the area to house businesses in these size ranges in 2014. Roughly 2% of the businesses (four) would require between 3,600 and 9,000 square feet, while one establishment would need between 9,000 and 18,000 square feet of space in 2014 and one would require over 18,00 square feet. Between 2000 and 2014, the greatest growth occurred in the amount of space required to accommodate mid‐size users in addition to very large users. In 2014, roughly 2.8 million square feet of space was needed to accommodate these users, compared to 1.8 million square feet in 2000, a 36% increase. This trend suggests a growing need for office spaces in the 1,800 to 3,600 square foot range. Most of this growth occurred in the Health Care and Social Assistance sector as well as the Finance and Insurance sector. Demand for commercial office space can also be generated from sectors other than the tra‐ ditional office‐using industries, including: Administrative and Support and Waste Manage‐ ment and Remediation Services (i.e. temporary employment agencies, security firms, clean‐ ing companies); Arts, Entertainment, and Recreation; and, Other Services (i.e. grantmaking, advocacy, drycleaning and laundry services). COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 127 Growth of Jobs Using Office Space The following table presents total employment growth trends and projections in the Commer‐ cial PMA from 2000 to 2030, including the estimated percentage of total employment among industries that typically occupy office space. For this analysis, we include jobs in the Infor‐ mation, Financial Activities, and Professional and Business Services and Public Administration sectors, as well as half of the jobs in the Education and Health Services sector. These figures were compiled by Maxfield Research and Consulting, LLC, based on data from Minnesota DEED, the U.S. Census Bureau Longitudinal Employer‐Household Dynamics (LEHD) program, and the Metropolitan Council. Between 2000 and 2010, the Commercial PMA gained 5,682 jobs (6.0%) while the estimated number of jobs requiring office space increased by 2,905 or 9.3%. Based on the Quarterly Census of Employment and Wages data from DEED, job growth in the industries that tradi‐ tionally occupy office space was outpaced by job growth in other employment sectors be‐ tween 2010 and 2nd Quarter 2016. The Corcoran Commercial Market Area gained 12,936 jobs (15.9%), while the number of jobs in the industries that typically occupy office space increased 9.9% (2,817 jobs). Employment % Office Jobs 2000 26.3% 2010 34.7% 2nd Q 2016 33.0% 2020 Forecast34.0% 2030 Forecast35.5% ChangeNo.Pct.No.Pct.Pct. 2000 ‐ 2010 7,3499.9%8,81045.1%8.4% 2010 ‐ 2016 12,93615.9%2,8179.9%‐1.8% 2016 ‐ 2020 5,6826.0%2,9059.3%1.0% 2020 ‐ 2030 8,6808.7%4,58413.5%1.5% *Office jobs include jobs in the Information, Financial Activities, Professional and Business Services, and half of the Educational and Health Services sectors. Sources: MN DEED; US Census Bureau LEHD; Metropolitan Council ; Maxfield Research & Consulting, LLC 94,47831,149 100,16034,054 108,84038,638 74,19319,522 81,54228,332 Total Jobs Office Jobs* TABLE 44 EMPLOYMENT GROWTH TRENDS AND PROJECTIONS ‐ OFFICE SECTORS CORCORAN COMMERCIAL MARKET AREA 2000 TO 2030 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 128 According to long‐term industry projections provided by DEED for the State of Minnesota, the number of jobs in office‐using industries is expected to grow 7.8% between 2014 and 2024. Office jobs accounted for 27.5% of all jobs in Minnesota in 2014 and are projected to increase to 28.4% of total jobs by 2024. Between 2000 and 2010, the proportion of office jobs increased in the Market Area from 26.3% in 2000 to 34.7% in 2010, then decreased slightly to 33.0% in 2016. We expect the proportion of office jobs in the Corcoran Commercial Market Area to expand at a pace that is similar to Minnesota, but potentially slightly lower, although the overall percentage of office jobs is expected to increase modestly, to 34.0% by 2020 and to 35.5% by 2030. This will result in the addition of 2,900 office jobs (9.3% growth) between 2nd Quarter 2016 and 2020. Another 4,584 office‐using jobs (13.5%) are expected to be added in the Corcoran Commercial Market Area between 2020 and 2030. According to a recent CoreNet Global Corporate Real Estate 2020 survey, the average amount of office space per employee has declined from over 200 square feet in 2010 to roughly 180 square feet per employee in 2012. With the addition of roughly 2,900 office jobs between 2nd Quarter 2016 and 2020 in the Market Area, it can be estimated that 522,000 square feet of office space would be needed to accommodate these new employees. The actual amount of office space needed will be less however, because this figure includes people working from home offices and some pro‐ fessional businesses may prefer to locate in retail space. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 129 Twin Cities Office Market Conditions Maxfield Research and Consulting, LLC analyzed office market trends for the Twin Cities Metro Area, including total rentable area, vacancy rates, rental rates and absorption. The data is pro‐ vided by Cushman & Wakefield|NorthMarq. The data includes information for multi‐tenant of‐ fice buildings greater than 20,000 square feet in size. Market statistics for each submarket are identified in the table on the following page. The following points summarize key findings from the Cushman & Wakefield|NorthMarq July 2016 Compass report. The market posted 58,684 square feet of positive absorption during the first three quarters of 2016, following 504,922 square feet of absorption as of 3rd Quarter 2015. Limited space absorption pushed the direct vacancy rate (excluding sublease space) up slightly to 14.1% from 13.6%, one year ago. Vacancy rates vary greatly across the Metro Area, with the West submarket (i.e. the I‐394 corridor) being the tightest submarket with a 9.5% vacancy rate, while the Southwest sub‐ market had the highest vacancy rate at 16.3%, followed by the Minneapolis CBD at 15.2%. Six of the seven submarkets experienced positive absorption during the first three quarters of 2016, led by the St. Paul CBD with 241,632 square feet of absorption and the West /Northwest submarket with 178,774 square feet of absorption. Across the Metro Area, Class A office space is the tightest product type with a 13.1% vacan‐ cy rate, although Class A properties experienced ‐77,442 square feet of negative absorption in the first half of 2016. Class B space, which experienced 132,181 square feet of absorption in the first six months of 2016, is 18.5% vacant. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 130 Rental rates are gradually increasing, particularly at Class A properties in high‐demand loca‐ tions. Marketwide, Class A rents increased 2.4% over the past year to $16.89 per square foot net. Class A rents have been climbing steadily since 2010, increasing 2.9% per year, on average. Class B rents are also climbing, rising 4.6% over the past year to $12.25 per square foot net. Vacancy in the Northwest submarket, which includes Corcoran, decreased by 2.2% to 14.8% after 113,178 square feet were absorbed in the past year. Class A vacancy in the Northwest Submarket is at 13.4%, while vacancy in Class B and C properties is at 18.9% and 8.9%, re‐ spectively. Demand for space in the Northwest submarket was strongest in Class B properties over the year, as 132,275 square feet were absorbed. Class A properties experienced 5,134 square feet of absorption and 14,529 square feet of Class C space was absorbed. Submarket # of Bldgs Total Rentable SF Total Vacant SF Vacancy Rate YTD Absorption Net Rent Minneapolis CBD10729,046,4595,147,93217.7%‐733,563$15.12 Northeast12510,224,3411,394,39313.6%48,375$12.64 Northwest364,435,973739,17016.7%101,821$11.98 South/Airport917,223,848891,70812.3%32,125$11.95 Southwest14016,371,9042,305,96614.1%‐211,068$14.02 St. Paul CBD407,260,503825,73411.4%248,328$11.87 West999,255,553820,1978.9%92,424$15.68 Total Market63883,818,58112,125,10014.5%‐421,558$13.76 Submarket # of Bldgs Total Rentable SF Total Vacant SF Vacancy Rate YTD Absorption Net Rent Minneapolis CBD10527,250,0813,592,78113.2%78,380$14.31 Northeast11911,503,7431,527,68313.3%227,849$12.65 Northwest354,365,039721,90816.5%(14,089)$13.39 South/Airport816,727,611980,18114.6%117,222$11.83 Southwest13716,487,6222,449,79014.9%172,849$14.01 St. Paul CBD417,608,3231,195,23815.7%43,203$11.68 West948,782,9811,193,23913.6%(237,181)$14.75 Total Market61282,725,40011,660,82014.1%388,233$14.02 Sources: Colliers International; Maxfield Research & Consulting, LLC 2016 Q4 2015 Q3 TABLE 45 OFFICE MARKET STATISTICS TWIN CITIES 3rd Quarter 2015 through 4th Quarter 2016 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 131 As depicted in the following graph, the delivery of new product in the Twin Cities coupled with a sharp drop in demand due to the recession caused direct vacancy rates to climb in the Northwest submarket between 2006 and 2009. Equilibrium in the office market is generally considered to be vacancy of approximately 10% to 12%. While vacancy for the entire market remains well‐above equilibrium, Class A va‐ cancy is at or approaching equilibrium in several submarkets suggesting that these submar‐ kets may soon be able to support new office development. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 132 There has been minimal multi‐tenant office development activity since the last of the pro‐ jects launched pre‐recession were delivered in 2008 and 2009, and there is very little new speculative suburban multi‐tenant space under construction or expected to get underway in the near term. However, there are three office buildings totaling 491,000 square feet under construction in Downtown Minneapolis. Despite recent modest tightening in the office submarkets, office vacancy rates remain above equilibrium and there is little demand for new speculative office development, par‐ ticularly in most suburban submarkets. The slow recovery has been driven, in part, by a shift in office space utilization as companies strive to become more efficient by increasing densities in office space. Additionally, the tight labor market is a major consideration for companies considering expansion or relocation. Twin Cities Medical Office Market Conditions Maxfield Research and Consulting, LLC analyzed medical office market trends for the Twin Cities Metro Area, including total rentable area, vacancy rates, and absorption. The data is provided by Colliers International. A medical office building is defined as a property where 50% or more of the tenants are medical‐oriented. Medical properties typically have a higher parking ratio than traditional office properties and are generally marketed to medical tenants and have the infrastructure capable to accommodate medical uses. Colliers International divides the local medical office market into two product types; On Cam‐ pus and Off Campus. On Campus properties are connected by a tunnel or skyway to a hospital or major ambulatory surgery center or located in a distinct area adjacent to a hospital or ambu‐ latory surgery center. Off Campus properties are not connected or immediately adjacent to a hospital or ambulatory surgery center. The following points summarize key findings from the Colliers International 2nd Half 2016 Compass report. Overall vacancy is 7.4%, down slightly from 7.9% as of 2nd Quarter 2015, with Off Campus vacancy at 6.8% and On‐Campus vacancy at 8.8%. Many On‐Campus facilities are fully‐ occupied with five hospital campuses reporting zero vacancy. The medical office market experienced 100,323 square feet of absorption during 2016, in‐ cluding 48,303 square feet of absorption in On‐Campus facilities and 52,020 square feet of Off‐Campus absorption. The Northwest submarket (includes Corcoran) contains 21 properties, totaling 1,650,341 square feet of medical office space. These properties were 6.3% vacant after experiencing 23,763 square feet of absorption in 2016. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 133 Going forward, mergers and alliances within the healthcare industry will impact demand for medical space. In an effort to become more efficient, independent practices will likely con‐ tinue merging or aligning with systems, reducing the number of independent providers in the market. The medical office market will be impacted as these new partnerships and or‐ ganizations evaluate their real estate inventory to determine if redundancies exist and where service delivery can be expanded. Additionally, the pool of potential patients has grown after roughly 180,000 residents of Minnesota gained health insurance due to the Affordable Care Act. In an attempt to serve this larger group of patients, the major health systems are restructuring their service deliv‐ ery models. This restructuring has involved the creation of new urgent care, transitional care, and ambulatory care facilities in locations that are closer to where people live. The Off Campus market will continue to evolve to find the best way to serve patients under the new healthcare model with an emphasis on delivering care closer to the patient. This will likely result in the continued trend of moving ambulatory care clinics away from On Campus hospital settings and healthcare systems are expected to continue locating in sub‐ # of Bldg Total Rentable SF Total Vacant SF Vacanc y YTD Absorption Net Rent On Campus403,143,998 277,183 8.8%48,303 $18.86 Off Campus897,525,578 511,507 6.8%52,020 $18.13 Northeast251,263,868 83,762 6.6%11,040 $18.48 Northwest211,650,341 103,434 6.3%23,763 $17.38 Southeast261,673,378 137,703 8.2%12,856 $18.75 Southwest171,943,999 49,487 2.5%9,747 $20.50 Total Medical Office12910,669,576 788,690 7.4%100,323 $18.34 # of Bldg Total Rentable SF Total Vacant SF Vacanc y YTD Absorption Net Rent On Campus403,159,141 276,155 8.7%48,609 $18.09 Off Campus857,432,219 565,037 7.6%‐51,346$17.75 Northeast241,259,367 94,051 7.5%‐20,150$17.86 Northwest191,570,254 126,755 8.1%6,320 $17.72 Southeast241,624,628 133,180 8.2%‐22,516$19.14 Southwest181,983,978 76,925 3.9%‐15,000$19.25 Total Medical Office12510,591,360 841,192 7.9%(2,737) $18.38 Sources: Colliers International; Maxfield Research & Consulting, LLC 2015 Q2 TABLE 46 MEDICAL OFFICE MARKET STATISTICS TWIN CITIES METRO AREA Second Quarter 2015 and Fourth Quarter 2016 2016 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 134 urban markets. This is expected to be a major trend as healthcare providers and practition‐ ers seek out space in locations that offer easier access and convenience to their patients. Almost 1.1 million square feet of medical office space is under construction with 28,000 square feet planned in Maple Grove. Selected Office Properties in the Commercial Market Area The following table shows selected office space currently listed as available for lease in or near the Corcoran Commercial Market Area. The data is provided to show the types and amount of space available along with pricing and class. Data was collected by Maxfield Research and Con‐ sulting, LLC from the Xceligent Commercial Property Exchange. Class A buildings, are generally newer, offer a variety of amenities, provide a good location with convenient access and visibility, and are generally considered the highest‐quality buildings in the area. Older Class B buildings are sometimes renovated and situated in a good location, while newer buildings are relatively small, located in non‐prime areas, and do not provide the amenities and finishes of a Class A building. Class C properties are typically the oldest in the ar‐ ea and are typically in average to poor condition. As depicted in the table, Maxfield Research identified properties actively marketing office space in the Corcoran Commercial Market Area. The majority of the properties with availa‐ ble space are located in Maple Grove and Plymouth. As illustrated in the following graph, Plymouth contains the highest concentration of availa‐ ble space, with 379,363 square feet (95% of the supply of available space in and near the Market Area). The remaining supply of available space is located in Maple Grove and one property in Loretto. No properties were listed in Corcoran. 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 PlymouthMaple Grove Amount of Available Office Space Corcoran Commercial Market Area‐2016 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 135 Forty percent of the office properties have two stories (eight properties) and four proper‐ ties have three stories (20%). There is also one, 12‐story property and one six‐story proper‐ ty. Building Location Year Built Bldg Size/ SF Tenancy SF/MF Taxes/ SF Op. Exp/ClassFloors Plymouth City Center II200229,878$13.50‐$17.00MT$6.00$8.94B2 15600 N. 36th Avenue2,504Net Plymouth City Center I200022,632NegotiableMT$5.32$6.48B1 15650 N. 36th Avenue2,741Net Rice Lake Plaza198610,665$22.00‐$22.00MT$4.91$9.29C2 13700 N. 83rd Way1,552 Prudential Building1980444,464MT$1.36$8.64B4 13001 Bass Lake Road91,000Net 4100 Berkshire Lane198829,040MT$3.12$7.38C3 4100 Berkshire Lane N.10,787 West Health ‐ Phase I1994104,000$22.00‐$22.00MT$8.26$15.00B6 2855 Campus Drive4,820 ATRIA Corporate Center1985350,631$16.00‐$17.00MT$4.62$6.42B5 3033 Campus Drive58,589 Two Carlson Parkway1998130,031$16.00‐$17.00MT$5.15$8.16B4 2 Carlson Parkway17,525 Maple Grove Executive Plaza199858,500$14.00‐$14.00MT$4.88$8.30 B3 7767 Elm Creek Blvd.2,799 4700 County Road 1920039,135$9.75‐$9.75MT$4.05$1.95B2 4700 County Road 192,490 Arbor Lakes Medical Bldg.200085,000$16.00‐$20.00MT$5.61$9.82B3 12000 N. Elm Creek Blvd.4,538 Plymouth Woods Office Ctr.‐‐‐115,000$18.00‐$19.00MT$10.23$8.50A 4 3200 Fernbrook Lane115,000Net Plymouth Office Center197430,712$8.50‐$8.50MT‐‐‐‐$8.95C2 3131 N. Fernbrook Lane10,059Net Fernbrook Town Office Park20017,653$20.00‐$22.00MT‐‐‐‐‐B2 3141 N. Fernbrook Lane225 Wedgewood Office Park199717,148$12.50‐$12.50MT$3.05$7.93B2 1303 Frontage Rd, Hastings10,543 Lakeway Office Park200454,000$11.25‐$12.00MT$2.90$1.75B2 925 Highway 55, Hastings1,337 7201‐7219 Forestview Ln20015,582$42.86‐$57.69MT‐‐‐‐B1 7201‐7219 Forestview Ln496 Waterford Park1987256,348$16.50‐$18.00MT$5.03$8.33B12 505 N. 169 68,140 Plymouth Office Center Bldg.197431,387$8.50‐$8.50MT‐‐‐$8.95C2 3140 Harbor Ln. N.4,713 Creekview Office Building198125,500$13.50‐$18.50MT‐‐‐‐‐‐C3 12800 Industrial Blvd.8,295 Sources: Xceligent; Maxfield Research & Consulting, LLC Modified Gross Net NNN Gross Net Net Net Net Net Net Gross Negotiable Negotiable Net Net Net TABLE 47 December 2016 CORCORAN COMMERCIAL MARKET AREA OFFICE BUILDINGS AVAILABLE FOR LEASE Lease Rates/ Lease Type PRIMARY MARKET AREA Gross COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 136 Fourteen of the 20 properties are classified as Class B office space, while only one is classi‐ fied as Class A. There is 115,000 square feet of Class A vacancy, representing 17% of all vacancy, while Class B properties contain 83% of the available space (119,000 square feet). A majority of the office buildings are considered “General Purpose” office properties (17 properties), suggesting that the occupancy is typically comprised of professional service‐ related firms (i.e. accounting, legal, real estate, etc.) There are also three Medical office buildings with 67,947 square feet of available space. There are no actively marketing office properties in Corcoran, although there are 20 office properties located in the Commercial Market Area, with 400,628 square feet that is availa‐ ble for lease. Commercial leases are generally net leases, as is the case in the properties in and near the Market Area as roughly 85% of the properties are marketing space under a net lease basis. The average net rent is $15.47 per square foot with quoted net rental rates ranging from a low of $8.50 per square foot to a high of $58.00 per square foot on a gross lease. The single Class A property does not really have a lease rate that is any higher than the Class B properties. In addition to the base rent for occupancy, net leases (also commonly referred to as triple‐ net or NNN leases) require that the lessee also pays maintenance and operating expenses such as taxes, insurance, utilities, and repairs. A gross lease requires that the lessee pays a fixed rent and the lessor pays the taxes, insurance and other charges regularly incurred through ownership. Tenants in these net lease properties pay approximately $12.90 per square foot on average for tax and operating expenses along with the base rent for the space, including roughly $4.97 per square for taxes and $7.93 for operating expenses. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 137 Office Development Potential This section focuses on factors that influence the demand for office space, primarily business and employment growth. The amount (in square feet) of additional office space supportable in the Corcoran Commercial Area is based on projected office employment growth and the amount of employment growth that would be capturable by suitable space located in the community. Our demand calculations are shown in Table 48 and are summarized in the follow‐ ing points. At this time, there is a limited amount of office space located in a retail center for an insurance agent and a financial services firm. It is likely that the lease rates for this space are lower than what would be charged for new space. We recommend that any new office space developed would be several years down the road, unless there is a single user willing to commit to take most, if not all of the space, in the building, on an extended lease period. There are an estimated 94,478 jobs in the Corcoran Commercial Market Area, approximate‐ ly 33% of which were in typical office‐using industries. This percentage is projected to in‐ crease modestly as job growth over the next several years, according to the Minnesota De‐ partment of Employment and Economic Development, will be predominantly among indus‐ tries that often require office space, such as Education and Health Services, Professional and Business Services, and Financial Activities. We project that by 2020, an estimated 34% of all jobs in the Corcoran Commercial Area will be in industries that typically require office space (34,054 jobs in the office‐using industries), and by 2030, approximately 35.5% of Commercial Market Area jobs will be in office‐using industries. Not all of the office‐using jobs created will seek or want space in office buildings. As shown earlier in this section, 71% of the office‐using businesses in the surrounding area have fewer than five employees. The majority of these businesses are likely one‐person or two‐person businesses with many operating from peoples’ homes. In addition to home offices, some businesses will prefer traditional retail space. Examples include insurance agencies, ac‐ counting services, financial services and health care providers that may seek retail space with higher visibility. Based on business size data for the area, we estimate that 66% of the office‐using jobs in the Corcoran Commercial Market Area are in traditional office space, or 20,558 jobs. Multiplying the estimated number of employees in office space by the industry standard of 180 square feet of office space per job, results in demand for 3.7 million square feet of of‐ fice space in the Commercial Market Area in 2016. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 138 As mentioned previously, corporate office users are reducing their footprints in an attempt to more efficiently utilize their office space, and the amount of space allocated per employ‐ ee has been declining steadily over the years. As such, we decrease the office space per employee metric from 180 square feet in 2016 to 170 square feet in 2030. Based on the analysis, demand for office space in the Commercial Market Area is expected to grow by 631,290 square feet between 2016 and 2030, including 229,638 square feet by 2020 and another 401,923 square feet between 2020 and 2030. Based on our survey of office properties, there is approximately 400,640 square feet of of‐ fice space available in the Commercial Market Area and there is no actively marketing office space for lease in Corcoran. We estimate that Corcoran could capture 10% of the total demand in the Commercial Mar‐ ket Area between 2016 and 2020 and potentially another 15% between 2020 and 2030. As such, we find that Corcoran could support approximately 12,283 square feet of office space by 2030. Because there is not any office space currently available in Corcoran, the remaining demand growth will be absorbed by existing vacancies at other property types (i.e. retail buildings) and new office developments on other sites located in the Commercial Market Area. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 139 The office demand calculation presented above is based primarily on employment and business growth factors. Demand for office space can also result from existing companies seeking opportunities to relocate or consolidate their employees and operations into new office space. These real estate decisions can be generated by the need to expand to sup‐ port additional employees or increase productivity, but they are often driven by a desire to become more operationally efficient. Business and Property Owner Interviews Maxfield Research interviewed retail business owners and property owners that currently have business establishments in Corcoran and/or have owned businesses or own property in Corco‐ ran that is near the proposed new Downtown District. Following summarizes the findings of the interviews: Many of the retail establishments interviewed stated they were not familiar with the specifics of the new proposed Downtown District and were also not familiar with the proposed realign‐ ment of County Road 10 along Larkin Road to County Road 116 which would extend to the north to County Road 30 after which it would extend west from County Road 116. 20162020 Projected number of jobs in Commercial PMA94,478100,160 (times) % of jobs in industry types that typically require offi ce spacex33.0%34.0% (equals) Projected number of office‐type jobs in the PMA=31,178 34,054 (times) % of office‐type jobs seeking/needing office space*x66%66% (equals) Projected # of employees in office space in the PMA=20 ,57722,476 (times) Square feet of office space per employeex180175 (equals) Projected demand for office space in the PMA (sq. ft.)=3,703,9163,933,283 Projected Growth in Office Demand in the Commercial Mkt. Area (sq. ft.) Total Growth in Office Demand (2016 to 2030) (minus) Square feet of absorption needed to reach market equili brium ‐ (equals) Corcoran Commercial Area office demand (2016 to 2030)= (times) % of demand capturable in Corcoran/5% to 10% (equals) Office Space Capturable in Corcoran (2016 to 2030)=20,985 to 41,969 Source: Maxfield Research & Consulting, LLC 631,291 211,600 419,691 *Percent of office‐type jobs seeking office space versus home o ffices or retail spaces. 108,840 35.5% Office Demand 38,638 4,335,206 66% 25,501 TABLE 48 PROJECTED DEMAND FOR OFFICE SPACE CORCORAN COMMERCIAL MARKET AREA 2016 to 2030 2030 170 2020‐20302016 ‐ 2020 229,368401,923 COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 140 Maxfield Research described the proposed realignment of County Road 10 to the owners and managers interviewed that were not familiar with the proposed changes (this represented a majority of those interviewed). If the business was already situated facing County Road 116, business owners and managers generally felt that the realignment would not negative impact their businesses. If the business is located on County Road 10, there was a much greater con‐ cern that a realignment of County Road 10 could significantly reduce customer traffic to the business. Business owners expressed concerns regarding improvements that may be made to County Road 116/10 during the realignment process. Their concerns centered on to to their businesses and that customers would be able to conveniently access the existing retail establishments dur‐ ing any roadway construction. Although signalized or controlled intersections were not identi‐ fied as needed, some type of center turn lane was mentioned as being a strong positive to im‐ provements along County Road 116 as traffic increases and future improvements are made to that roadway. Those interviewed felt that attracting more housing to Corcoran would be beneficial to the community and beneficial to commercial businesses. Many of the existing commercial busi‐ nesses currently draw customers from Corcoran, Maple Grove, Rogers, Plymouth, Medina, Rockford, Independence and other nearby areas. Several businesses identified that new households in Corcoran could potentially increase their customer bases. Conversely, business owners were concerned that attracting other retail businesses that would offer goods and ser‐ vices to what is already in Corcoran would simply create a situation where both or multiple businesses may not be able to generate sufficient revenue. Businesses and property owners interviewed expressed a desire to see Corcoran grow and felt that initially this would be best achieved through an increase in housing and households to support the existing commercial base in Corcoran. Those interviewed felt that additional retail development in Corcoran would not likely be attracted in the short‐term until there were addi‐ tional rooftops in the community to support more commercial space. Business and property owners noted that it is difficult for younger households to settle in Cor‐ coran and prices for existing new homes are high. There is limited new construction, which is priced at the move‐up and executive level and existing homes often have large acreages associ‐ ated with them. There was a need expressed for ownership housing that would be more af‐ fordable to younger families. If young families would locate in Corcoran, then there would also be a greater potential to attract an elementary school to the community. To summarize, the top concerns/comments of those interviewed were: Ability to maintain convenient commercial access existing businesses from County Road 116 during any widening or improvements to the roadway; consider a center turn lane for County Road 116/10 as improvements proceed. COMMERCIAL MARKET ANALYSIS MAXFIELD RESEARCH AND CONSULTING 141 A potential reduction in access/customer traffic to existing businesses that currently front on County Road 10; this could negatively impact businesses that rely on this traffic. Support was expressed for increased housing in close proximity to the existing commer‐ cial district; several businesses were interested in how quickly new housing may be add‐ ed; there was a preference for new ownership housing versus rental housing; senior housing was also mentioned as a positive to retain existing households that may need to relocate to other options from a single‐family home. Currently seniors that need ser‐ vices must locate outside of Corcoran. Those interviewed generally felt that additional housing should be a priority, rather than trying to attract additional retail or office uses to the community; office and retail uses would follow new housing based on market demand. CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 142 Introduction The previous sections focused on the “demand” and “supply” factors for various real estate sec‐ tors, including single‐family homes, multifamily residential (owned and rented), senior housing, retail, and office. This section summarizes demand calculated for specific housing products, as well as commercial property types, in the Market Area. Tables and charts included in this sec‐ tion illustrate the level of demand by property type that could be captured in Corcoran. Summary of Findings The potential for additional retail and office space in Corcoran is restricted currently, by the level of residential development in the community. There is an ample supply of agricultural land near the intersection of Co. Road 10 and Co. Road 116, and several large tracts are listed as available for sale. Corcoran is emerging as a new suburban growth area as development con‐ tinues to push north and west from Maple Grove and Plymouth. While there is ample land available for new development in the commercial core and adjacent surrounding land parcels, some of the existing structures in the commercial core are in need up updating or removal. A cohesive redevelopment plan for existing built areas will strengthen the ability of new construction to take hold in the community. Community services are available near the existing commercial core including ballfields, parkland and city offices. These can an‐ chor new development to support a stronger community gathering center for Corcoran. Existing commercial retail and office uses primarily serve the immediate residential base and traffic that passes along Co. Roads 10 and 116. Industrial businesses located in the industrial park employ people that utilize the existing commercial businesses. Major retail goods and ser‐ vices and entertainment are located in Maple Grove, a short drive from Corcoran. Those living on the east side of Corcoran are likely to regularly access goods and services in Maple Grove. Those residing on the west side of Corcoran may go to Maple Grove, but may also travel to Rogers and/or Rockford. Those on the south end may travel down to Plymouth. Strong commercial cores typically result from several factors including high traffic volumes, res‐ idential density, employment concentrations and a strong regional pull. New residential devel‐ opment is occurring at Ravinia and absorption has been strong. However, Corcoran will need to increase its rate of residential development in order to support additional retail and office de‐ velopment in the core commercial area. Traditional downtown areas are typically compact with buildings set side‐by‐side, allowing cus‐ tomers to easily walk from one shop to another. While it is important to consider how struc‐ tures are placed on sites and the quality of those structures, the primary consideration for Cor‐ coran at this time is to increase the level of residential development and create a plan for add‐ ing additional commercial development west of Co. Road 116 and at the Co. Road 10 and 116 intersection. CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 143 Initial interest in the commercial core district will most likely be generated from gas sta‐ tion/convenience stores, fast food restaurants (such as Subway), coffee shops and other goods and services that can draw customers from drive‐by traffic and from the nearby growing resi‐ dential base. With the future construction of the Hy‐Vee grocery a short distance from the Cor‐ coran commercial core, it is likely that another grocery may be several years away. Smaller gro‐ cery markets and/or a drugstore could expand the potential daily offerings in the area prior to Corcoran attracting a major grocery. Over the next five to ten years, Corcoran presents a viable location for locally‐owned conven‐ ience‐ and neighborhood‐oriented retailers, smaller sit‐down restaurants and a wide variety of residential products. Single‐family subdivisions will most likely be located on sites near to the commercial core, while rowhomes and apartment‐style buildings could be constructed within the commercial core and some within mixed use structures. Despite the development of a number of mixed‐use buildings, this product type remains the most difficult to lease and occupy from a retail and office perspective. Some of the difficulty is the design of the spaces, but over‐ all, most areas are not sufficiently dense (population) to support the characteristics of mixed use within the same structure. In addition, Corcoran has limited infrastructure in place to ac‐ commodate pedestrian‐oriented development (i.e. no sidewalks and no pedestrian crossings). The limited amount of development that exists in the Corcoran commercial core makes it ap‐ pear compact and easily walkable as there are limited locations to walk to. As the commercial core expands and there is a need for additional infrastructure and parking, careful planning will be necessary to ensure a walkable environment. Demographic factors that are influencing the area include modest population and household growth which is anticipated to accelerate in the coming years, an overall aging population, in‐ come growth, shifting household types, and some job growth will generate growing demand for a variety of housing products in Corcoran. The expanding population and household base in the community will create a growing need for commercial goods and services, stimulating demand for new commercial space in the area. Rooftops equals retail. Existing and future businesses in Corcoran can also capture sales from the employee base in addition to the local resident population. Employees also represent a potential market for cur‐ rent and future residential development in Corcoran or in an area that would be considered as the Downtown core. County Road 116 and Co. Road 10 provide good access and visibility to businesses located in the area and as the community develops further, traffic volumes are ex‐ pected to grow steadily over the next 20 years. At the present time, the Corcoran commercial core is anchored by a few long‐time businesses including two bar/restaurants, convenience/gas station, auto parts store, liquor store and a few other more recent retailers. While these businesses provide goods and services to a portion of the local resident base and to through traffic along the major roadways, most residents and employees are conducting their shopping outside of the community. CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 144 Demand Summary Table 49 depicts the total level of demand in the relevant market area for each product type as well as the amount capturable within various timeframes in Corcoran. As defined previously the Market Area for housing products is referred to as the Housing Mar‐ ket Area throughout the report. The Housing Market Area can be described as an aggregation of the following communities: Corcoran, Greenfield, Independence, Loretto, Maple Grove, Ma‐ ple Plain, Medicine Lake, Medina, Plymouth and Rogers. The Corcoran Commercial Market Area for neighborhood retail and office space is defined as Corcoran, Greenfield, Loretto, Maple Grove, Medina, and Plymouth. Single‐Family Demand In total, we find demand to support 1,443 units of single‐family housing between 2016 and 2030 in Corcoran. Development of housing will drive demand for local retail goods and services that could be supported in a central commercial core in Corcoran. Development of single‐ family homes is anticipated to be at suburban densities of a minimum of three units per acre. Capture Rate Multifamily Residential (2016 to 2030) Market Rate Rental2,266units5%113units For‐Sale Residential19,375units5%1,690units Single‐Family 14,428units10%1,443units Owned Multifamily 4,947units5%247units Market Rate Senior Housing1,506units212units Active Adult/Few Services748units113units Ownership351units15%53units Rental397units15%60units Congregate311units15%47units Assisted Living146units15%22units Memory Care301units10%30units Commercial (2016 to 2030) Neighborhood Retail101,930Sq. Ft.40%40,772Sq. Ft. Office419,691Sq. Ft.5%20,985Sq. Ft. Note: Demand for Market Rate Senior Housing and GO Rental to 2021 only Source: Maxfield Research & Consulting, LLC TABLE 49 CITY OF CORCORAN AND CORCORAN COMMERCIAL AREA DEMAND SUMMARY Excess Market Area Demand Demand Capturable in Corcoran CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 145 Multifamily Demand In total, we find demand to support 360 units of owned and rented general occupancy multi‐ family housing between 2016 and 2030 in Corcoran, including 113 units of market rate rental, 247 units of owned multifamily (primarily townhomes, twinhomes or detached villas). Demand was also identified for 212 market rate senior housing units by 2021. Owner‐occupied multifamily housing development in Corcoran would target two primary mar‐ ket segments: the first‐time home buyer market, particularly from couples that do not have children and older adult households (never‐nesters or empty‐nesters) and retired individuals and couples. The strongest sources of demand for new rental housing in the HMA will likely be singles and couples without children in their late 20s to mid‐40s who work in nearby suburban communi‐ ties. Mid‐age households (never‐nesters or empty‐nesters) who want to sell their single‐family homes and have more freedom for leisure pursuits could also account for a portion of demand for new rental housing in the area. Apartment development is currently very active in the Twin Cities, with numerous projects ei‐ ther under construction or in the development pipeline. Although many of the new rental properties have been built in or near Downtown Minneapolis, development is expanding out‐ ward to second and third‐tier suburban locations near areas of high employment. Recently opened suburban rentals have experienced strong absorption. New suburban rental properties are charging rents (on average, per month) between $1.50 and $1.80 per square foot, with sev‐ eral projects exceeding $1.80 per square foot (Village at Arbor Lakes in Maple Grove). Our re‐ view of current market conditions in the Market Area suggests that pricing for new construc‐ tion, market rate general occupancy rental apartments in Corcoran would average approxi‐ CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 146 mately $1.55 to $1.60 per square foot in 2016 dollars. A rental townhome concept may also be appropriate for Corcoran, but if developed in the commercial core, the density would have to be quite high. There is currently excess demand for 748 active adult/few services units and 758 service‐ enhanced units in the HMA. Using capture rates of between 10% and 15%, Corcoran could support 113 active adult units and 99 service‐enhanced units as of 2021. Although we believe that Corcoran could support a modest size adult/few services development (rental), we rec‐ ommend that the development of any service‐enriched senior housing be delayed for at least another six to ten years until the residential base has increased. We would however, recom‐ mend consideration of single‐level townhomes and/or an age‐restricted cooperative within the next five years. Commercial Demand In total, we find demand to support up to 62,000 square feet of commercial space in a central commercial core in Corcoran by 2030, 40,800 square feet of neighborhood retail space and 20,985 square feet of office space. CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 147 The retail leakage data suggests that Corcoran could potentially attract retail outlets in a variety of retail categories. The most likely uses however, to be drawn to the area would be neighbor‐ hood and convenience‐oriented goods and services where there is significant leakage such as full‐service and limited‐service restaurants, health and personal care stores and business ser‐ vices. Retailers could capture potential sales from several sources, including; area households, employees working at businesses establishments in the area and drive‐through traffic. We anticipate that new construction retail space would require lease rates of between $20.00 to $25.00 per square foot, on average, in 2016, which is likely substantially higher than could be supported in 2016. National retailers would likely be able and willing to pay the higher rate for new construction retail space, but some locally‐owned retailers may have a difficult time sup‐ porting new construction rents. The issue here is not the lease rate, but the amount of retail sales volume that would be generated to support a diverse variety of retail establishments in Corcoran. In order to support the higher lease rate for new construction, more rooftops are needed. Based on the composition of business establishments in the surrounding area, we anticipate that there will be growing demand from office‐using businesses that offer services to local households, such as; health care providers, insurance agencies, accountants, and real estate agents. While vacancy rates in the multi‐tenant office market are above equilibrium, there is no office space currently listed as available for lease in the PMA, and continued household growth in the Market Area will stimulate demand for services from businesses in these sectors. Based on the projected demand for office space in (20,985 square feet), there appears to be limited market potential for a traditional stand‐alone multi‐tenant office building. However, this level of demand may best be satisfied by the development of a multi‐tenant, mixed‐used commercial building marketed to smaller (2,000 to 4,000 square feet) users in these traditional office‐using industry sectors, as well as retailers and non‐traditional office users. Mixed‐use buildings with street level space could potentially accommodate demand from some of the us‐ ers that would typically lease traditional office space. It is most likely that as the residential market expands, health care providers would be strong candidates for this type of space. CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 148 Strategic Plan and Implementation Guide Based on the information gathered in the preceding analysis, Maxfield Research and Consulting, LLC prepared recommendations for a strategic implementation plan for development in Corco‐ ran. These recommendations address the following issues; development timing for various products, marketing and promotion, key locations for development and redevelopment, poten‐ tial funding sources, and developer recommendations. Development Sites It is our understanding that the existing industrial park will remain in Corcoran at its current lo‐ cation and development of the commercial core will extend principally to the northeast of the industrial park on the east side of County Road 50/116. It is likely that the current businesses located on the west side of Co. Road 116 and south of the current County Road 10 will remain in the short‐term and will be complemented by uses that will be added to the area. County Road 10 will be realigned to the south along Larkin Road, east of County Road 116 and then will extend north along the current County Road 116 align‐ ment up to Meister Road, where it will then extend to the west. Businesses that are currently located along County Road 10 may remain, relocate or may be removed to make way for new space. As the community grows, there will be opportunities for existing businesses to expand their customer base and potentially expand the size of their businesses. Marketing and Promotion In an attempt to maximize the development potential of Corcoran, we suggest a coordinated marketing strategy be developed and implemented. The following points highlight some of the key factors that could be incorporated into a marketing effort. The City of Corcoran engaged community stakeholders in creating the current Downtown District concept which is shown in this report. The current concept shows a mixed use dis‐ trict that includes medium and high‐density residential development along with commercial retail/office space and open space. The current concept calls for a pedestrian‐oriented, walkable compact district. Marketing of vacant commercial space and development sites in Corcoran. This could in‐ clude traditional commercial real estate marketing (i.e. listings on the commercial property exchange). The City should also publish marketing information on their website, with mate‐ rials geared towards businesses that may be seeking space without the assistance of a commercial real estate broker. Commercial development in Corcoran will, in the initial stages, most likely attract local and regional convenience‐ and neighborhood‐oriented retailers and office users serving local households and employees. Table 50 provides a summary of these types of business estab‐ CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 149 lishments along with typical space sizes. As Corcoran grows, households living in the com‐ munity are most likely to prefer having a selection of convenience and neighborhood items located in close proximity, rather than having to drive a substantial distance to access these items at other locations in Maple Grove and Plymouth. Funding Sources Maxfield Research conducted a brief search of potential funding sources that might be accessed to support the City’s efforts for development in the designated commercial core. They include: Business District Initiatives can be used to support development efforts to enhance the commercial core. Eligible uses include marketing, promotion, branding, technical assis‐ tance, business façade improvements, design or implementation of street furniture, among others. Corridor Planning grants may include funding for land use, housing, pedestrian or bike con‐ nections, public realm improvements, sustainability, among others; Commercial Rehab Program – CDBG Fund Allocation, but excludes façade renovations; Retail UsesPersonal/Professional Service Use Variety Store1,900‐8,900Cosmetics/Beauty Supplies1,600‐2,100 Dollar Store2,900‐8,000Dry Cleaner/Laundry1,500‐2,000 Specialty Food2,700‐2,800Hair Salon1,000‐1,250 Bakery1,500‐1,500Nail/Tanning/Day Spa1,200‐3,500 Health Food1,200‐1,800Photographer/Film Processing1,300‐1,700 Convenience Market1,000‐1,200Photocopy1,400‐1,400 Restaurant (without liquor)2,600‐4,000Tailor900‐900 Restaurant (with liquor)2,800‐5,000Mailing/Packaging1,200‐1,350 Ice Cream/Sandwich Shop1,200‐2,000Learning Center/College2,400‐2,400 Hamburger/Pizza/Fast Food1,400‐2,400Employment Agency1,500‐1,600 Clothing/Shoes/Footwear1,700‐4,500Accounting and Finance1,400‐1,600 Home Accessories8,000‐9,000Bank2,500‐3,200 Electronics/Telephones1,200‐2,400Insurance1,000‐1,200 Hardware10,000‐10,100Real Estate1,700‐2,400 Automotive6,000‐7,000Optician/Optometrist1,500‐2,000 Sporting Goods4,250‐8,500Medical and Dental1,500‐1,600 Hobby/Arts/Crafts4,500‐9,200Veterinary1,600‐2,000 Gifts/Books/Games/Pets1,400‐4,000Music Studio/Dance2,200‐2,300 Drugstore/Pharmacy9,600‐10,000Health Club1,700‐3,600 Sources: Urban Land Institute/International Council of Shopping Centers; Maxfield Research & Consulting, LLC TABLE 50 POTENTIAL COMMERCIAL TENANTS CORCORAN COMMERCIAL CORE Median Size Range (Sq. Ft.) Median Size Range (Sq. Ft.) CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 150 National Preservation Funds – funds available through various preservation groups to re‐ store and maintain historic properties; The Minnesota Department of Employment and Economic Development offers several site cleanup and redevelopment funding programs including the Redevelopment Grant Program and the Demolition Loan Program. The Metropolitan Council offers four types of LCA grants to communities including the Tax Base Revitalization Account which provides funding for contaminated sites to create jobs and/or affordable housing; Livable Communities Demonstration Account that provides funds to support development and redevelopment that links housing, jobs, and services and demonstrates efficient use of land and resources; Local Housing Incentives Account which provides funds to produce and preserve affordable housing options; and transit‐oriented development. Implementation and Timing We recommend that the City focus initially on developing additional single‐family and multi‐ family owned housing in Corcoran to increase the market support for retail goods and ser‐ vices. As there are more rooftops in Corcoran, retail and office users will be more willing to locate in Corcoran to provide goods to households residing in the immediate community. New single‐family development is occurring south of the proposed Downtown District at the new Lennar subdivision, Ravinia. In order to jump start the new Downtown District, the City could encourage new residential development west of Maple Hill Road with single‐family and for‐sale multifamily development including rowhomes and detached villas. As new res‐ idential is occupied, future economic development efforts may begin to attract some addi‐ tional retail goods and services on parcels located immediately to the west of County Road 116. As the community grows, existing retail businesses are likely to see additional opportunities and could be encouraged to redevelop their properties, relocate to new space or conceive of new retail formats. There is already an awareness of existing businesses in the area and that awareness could be used to leverage additional opportunities from long standing rela‐ tionships. At the same time, there will be new businesses that are likely to want to locate in Corcoran to take advantage of the spending power of the growing household base. Current opportunities include additional single‐family development, owned multifamily de‐ velopment and rental multifamily. The multifamily components, if developed in the short‐ term, should be modest in size, and specifically targeted to attract younger households and older adult households. At this time, we believe that a mixed‐use development would not be appropriate for the commercial core because of limited market support. Higher‐density mixed‐use development should be considered after more initial development occurs on properties surrounding the commercial core. CONCLUSIONS AND RECOMMENDATIONS MAXFIELD RESEARCH AND CONSULTING 151 We recommend that the City begin contacting residential developers to support new hous‐ ing construction. In addition, targeted solicitation of specific types of retail goods and ser‐ vices could be implemented to direct the types of development that the City and the com‐ munity would like to see for their commercial core. Timing may not always be synchro‐ nized, but it will let the development community know that Corcoran is interested in ex‐ panding its residential and commercial base. STAFF REPORT Agenda Item 11b. Council Meeting: April 13, 2017 Prepared By: Director Matt Gottschalk Topic: Address Specific Crime/Drug Issues to Retain Safe Atmosphere Action Required: Appoint 2 Council members to the project committee Summary: During the Council’s goal setting meetings on February 27th and 28th the Council identified Addressing Specific Crime/Drug Issues to Retain a Safe Atmosphere as a City goal. Council approved a work plan for the goal at the March 23rd meeting. Step one of the work plan is to identify two council members to serve on the project committee. The goal of the committee will be to specifically define the issues, set measurable goals, and help develop a Council supported action plan. Staff is requesting that the Council appoint 2 representatives to the project committee. The committee will also consist of the Director of Public Safety and the Police Lieutenant. The committee will bring an action plan to the Council by June 30, 2017. Financial/Budget: Staff and Council time is the only cost associated with this portion of the goal. Alignment with Values: This item relates to the following adopted values: EXCELLENCE AND QUALITY IN THE DELIVERY OF SERVICES We believe that service to the public is our reason for being and strive to deliver quality services in a highly professional, cost-effective, and friendly manner. OPEN AND HONEST COMMUNICATION We believe that open and honest communication is essential for an informed and involved citizenry and to foster a positive working environment for employees. PROFESSIONALISM We believe that continuous improvement is the mark of professionalism and are committed to applying this principle to the services we offer and the development of our employees. Options: 1. Appoint two Council members to the committee. 2. Elect not to appoint two Council members to the committee and hold a work session instead. Staff Report—April 13, 2017 Council Meeting Prepared by Director Gottschalk Page 2 3. Alter the work plan with specific direction. Recommendation: Appoint two Council members to the committee. Council Action: Appoint two Council members to the committee. Attachments: None STAFF REPORT Agenda Item 11c. Council Meeting: April 13, 2017 Prepared By: Brad Martens Topic: Extension to Roehlke Purchase Agreement Action Required: Direction Summary: The City of Corcoran has received a proposal from an attorney for the Roehlke family to extend the purchase option in the agreement. The proposal is to extend the option to exercise until after fall 2018. Cost would not increase between October 2017 and October 2018 (essentially the “per annum” increase would not take place for a year). The City Council should provide staff direction on whether there is support for the proposed extension. If there is support, the attorney for the Roehlke family would draft an amendment which the Council would need to approve. The Council discussed the purchase agreement at the February 9, 2017 meeting and directed staff to take no action, essentially letting the option expire. Extending the option allows for the Council to consider the purchase longer, however it is unlikely that significant new information will be known a year from now. Financial/Budget: The existing purchase agreement outlines the following three options: Option 1: $598,000 + 2% per annum from June 1, 2014Option 2: $520,000 + 2% per annum from June 1, 2014Option 3: $520,000 + 2% per annum from June 1, 2014 It is anticipated that it will cost approximately $2,500,000 to develop the site. These costs are currently anticipated in the City’s five year financial management plan. Alignment with Values: This item relates to the following adopted values: EXCELLENCE AND QUALITY IN THE DELIVERY OF SERVICES We believe that service to the public is our reason for being and strive to deliver quality services in a highly professional, cost-effective, and friendly manner. FISCAL RESPONSIBILITY We believe that fiscal responsibility and the prudent stewardship of public funds is essential for citizen confidence in government. Options: 1.Direct staff to coordinate an amendment to the purchase agreement. 2.Direct staff to take no action to coordinate an amendment to the purchase agreement. Recommendation: Staff strongly believes there is a shortage of athletic space in the City of Corcoran, especially with the anticipated growth. This is supported through data presented at the February 11, 2016 work session. Ultimately however, it is a policy decision on where to purchase athletic space, at a location and price desirable to the City. Council Action: Direct staff on action related to the proposed amendment to the purchase agreement. Attachments: 1. Letter outlining proposed extension ROBERT M.PEARSON,P .A. 13005 MAIN STREET ROGERS,MINNESOTA 55374-9401 TELEPHONE:(763)428-2297 FACSIMILE:(763)428-2298 ATTORNEY AT LAW Robert@RMPearsonLaw.com ROBERT M.PEARSON Cell 763 360 6103 March 16,2017 City Administrator Brad Martens City of Corcoran 8200 County Road 116 Corcoran,MN 55340 Email Only bmartens@ci.corcoran.mn.us Reference Wesley and Eileen Roehlke Farm Property Option Dear Mr.Brad Martens: I had talked with you about the possibility of extending the existing option agreement.I am writing this letter in hopes of pursuing such an agreement. Imet with the children of Eileen and Wesley Roehlke and they have agreed.What Iam proposing is that the option agreement be amended to do two things. First that the option not be exercised by the City until after the Fall of2018.This would allow for the crops to be taken from the property. Second,the price in the option would remain the same as if the option were exercised in October of 20 17.That is the price would not increase over the about one year wait. The City would still be under do obligation to exercise the option.The City would retain of its other rights in the option to purchase. Should you have any questions,please feel free to contact my office. Very truly yours, ROBERTM.PEAR~N,P.A. Roy1d~~vr~---··· RMP:kja City of Corcoran 2017 City Council Schedule Agenda Item 12. April 17, 2017 City Hall Open House – Comp Plan 6:00 pm – 8:00 pm April 20, 2017 Comp Plan Meeting – Big Picture Items April 27, 2017 Met Council Report – Councilmember Rodriguez Planning Project Update Code Compliance Report Open Book Meeting Report Performance Report – First Quarter CHOL/IUP for Upholstery Business Pheasant Ridge OSP Sketch Plan Action steps to retain and attract businesses Review of Mission, Vision, Values Action steps to increase communication Fire RFP Review May 11, 2017 Hackamore Road/Steeple Chase Connection – approve quote and project 2016 Surplus Allocation Petition for Paving – Sundance Road (from June 9, 2016 meeting) Garbage and Recycling Requirements for Haulers Western Water Loop Feasibility Study May 18, 2017 Comp Plan Meeting – Land Use/MUSA/Development Rights May 25, 2017 Employee Recognition Mike Pritchard – 5 Years of Service Planning Project Update Code Compliance Report Select Action Steps to Accomplish Goal “Attract and Retain Businesses” Discuss action steps to increase building rights