The Hopkins HRA did have a purchase agreement in place for both properties based on a different developer and different market conditions. That purchase agreement for the Park Plaza started at $6.2 million but escalated to more than $6.7 million. The property has an appraised value of $5 million, and the City offered the owner $5.5 million. The purchase agreement was rescinded after the appraisal and after the new developer and HRA concluded that the redevelopment was not economically feasible based on the purchase agreement.

The property at 525 Mainstreet was recently appraised for $440,000 and the owner was offered $480,000. It should be noted that the owner paid $120,000 for the property in 2002.

The attorney for 525 Mainstreet (Mainstreet USA) indicated the City needs to compensate the owner for both the property and his business. The City is not interested in purchasing the owner of 525 Mainstreet’s (Mainstreet USA) business and feels that the owner has been offered a fair amount for the property. The owner did recently relocate his business to St. Paul, and by all accounts did well in that location, so the City does not believe that the acquisition of their property in Hopkins will end the business.

The Hopkins Park Plaza would be demolished as well as two single family homes. The single family homes have significant deferred maintenance issues and are surrounded by commercial and multi-family uses.

An average Hopkins Park Plaza apartment is an efficiency unit with no bedroom or kitchen, is 275 square feet and rents for $754 per month. This is not affordable housing, is not family housing, and is not housing designed to meet the needs of our workforce.

The apartment building at the northwest corner of the block will remain.

The proposed project would involve the construction of 254 units of upper-end apartments. The apartments would be constructed to accommodate conversion to condominiums when the condominium market shifts. There will be a variety of unit sizes, all with amenities associated with luxury housing.

The City of Hopkins does not have a comparable housing product. The project will be targeted to young to mid-age professionals, empty nesters and early retirees. It will potentially also provide housing for many of the new Cargill employees, allowing them to live and work within walking distance. The project will bring income diversity to the neighborhood, which currently features a significant amount of affordable and subsidized housing options.

The project also will contain approximately 13,000 square feet of new retail space, adding to the draw of Mainstreet.

After an offer to purchase has been made and rejected, the City or HRA must hold a public hearing on the use of eminent domain. Following the hearing (held on June 17, 2008) and passage of a resolution authorizing the action, a petition is filed with Hennepin County requesting the use of eminent domain to acquire certain property.

The Hennepin County Courts then hold a hearing on the petition. If the Judge upholds the petition, Commissioners are appointed, the value determined, and the award made. The decisions of the judge and commissioners can be appealed, making the exact timeline for the entire process very difficult to predict.

The City of Hopkins had the properties appraised by an independent, third party, certified appraiser. The owners were provided a copy of the appraisal along with the offer to purchase. During the eminent domain proceedings, the owners will need to hire a qualified appraiser to conduct their own appraisal. Both appraisals will be submitted to the Hennepin County Courts and shared with the Commissioners assigned the case. The Commissioners, who are experts in the real estate field, will review the appraisals, view the property, conduct their own analysis, and determine a fair market value. That is then the amount that the HRA must pay to receive title to the property.

In addition to the award based on value, the owners and displaced tenants may be eligible for moving and/or relocation assistance under the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA).

No. Unlike a “quick take” eminent domain proceeding, the HRA is using the traditional process under which the HRA is not required to follow through with the purchase if the award is viewed as unreasonable. In that instance, the property owners would be eligible for their attorney’s fees to be reimbursed, which would be paid by the developer.

It is also possible that an acceptable purchase price will be reached between the HRA and the property owners at any time during the process. In that case, the petition to use eminent domain would be withdrawn.