Tuesday, December 29, 2009

New I-94 Interchange NOT a "Stones Throw" away

November 5th, 2007
New I-94 Interchange NOT a "Stones Throw" away

You may recall in February that Beard Group, who are proposing "Stone's
Throw", a 634 acre mixed use development in Hassan Township, led the way to
lobby for a new TIF district and interchange at I-94 and Brockton Lane
between Maple Grove and Rogers. While the State Legislature turned it down,
the Cities of Dayton and Rogers, Hassan Township and The Beard Group funded
a transportation study for the interchange.
The study was not all favorable to the new interchange, as it found a new
ramp would likely INCREASE traffic on I-94 with more short local trips.

Back in February the Beard Group said they have secured $2 million in
funding for the intersection IF a new Tax Increment Financing (TIF) district
is approved by the Minnesota Legislature
Eight months later, when asked to put even more money towards moving forward
with the interchange, the Beard Group representative said "To be honest with
you, as the developer we put $350,000 into this so far. Our lenders cut off
our spending of any kind of studies but transportation. We're in bad shape
here. The reality is we're in a situation where we may not be able to go
forward with this project. We've been working on this for two years. We
can't get our plat approved or assurance to actually do all the

The Stones Throw project has never made sense to me. It was been advertised
and promoted like the plat was a done deal, including a series of articles
by the developer in Real Estate Journal with the theme "this is the right
way to get a major development approved." 183 acres are being promoted by
their commercial real estate broker as Commercial land, like someone would
built a "HassonDale" at that location. Even IF they were successful at
getting the new interchange built, what realtors would build stores in
"HassonDale" that aren't already in nearby Maple Grove, including the newest
shopping center by the new Hospital, less than 2 miles from Stones Throw. To
the west of the site new strip centers sit vacant in Rogers for small
stores, and for Big Boxes Rogers already has Target, Kohls, Cub, Best Buy
and Cabelas.

What about residential? The idea of Stones Throw calls for 1,361 units of
life cycle housing, consisting of starter homes to high end custom homes. As
far as schools, Stones Throw is just a couple miles from both Maple Grove
and Rogers High School. Problem is, most of Stones Throw is in the Buffalo
School District. While Buffalo schools are well regarded, its a long drive
for Johnny's hockey practice-about 1/2 hour each way. However, at the right
price housing could work there. Not Maple Grove prices, St. Michael/Otsego

When the Beard Group said " we're in bad shape here" he was probably
thinking of his debt service. Because they have already closed on 365 acres
of the land to the tune of $31 million dollars. At the aggregate number of
$85,000 an acre for a corn field that seems high but not stupid high-even
the site had an approved plat. And some of it was commercial in the comp
plan, but its all Residential. But you need to look beyond the aggregate
numbers to each of the 4 parcel purchases.

Parcel #1 as 21.07 acres closed in July 2006 for $1,700,000 or $80,600/acre.
This is in the Hassan Comp plan as residential, 2001-2005 sewer phasing. A
nearby parcel sold for around $75,000 an acre in 2006 that has been platted
and has houses on it now.

Parcel #2 is 253 acres in the 2016-2020 phasing plan for $16 million or
$64,000/acre closed in April of 2006.

Parcel #3 is 38 acres in th e 2001-2005 phasing plan that sold for $5
million in April of 2006.

Parcel #4 closed in April of 2006 was nearly $8 million for 52 acres for
$153,144. Here's where it really gets stupid. No frontage on I-94,
residential land use-and most of this phasing plan 2016-2020! Without an
approved plat I would need to appraise this AS IS. And the highest
comparable sale I'm aware of in the area is 35 acres purchased in 2005 in
St. Michael for $38,000/acre that is 2012+ in the phasing plan. I don't
understand how this land appraised!

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