The EDA has been working for the past six years to assist the current Master Tenant, Shakopee River City Centre Associates LLC, in filling the commercial tenant spaces.  RCC since its construction, has not been able to energize the northern side of First Avenue.

The EDA's attorneys along with the Scott County's CDA have been working with the existing Master Tenant on a possible exit strategy.  The Master Tenant is willing to make a financial settlement, and in turn, allow the EDA to take over the Master Tenancy.  Under the current agreements, the Shakopee EDA becomes the landlord for the Master Tenant in 2025 and the Master Tenant has possession until 2035.  The entire development, under current agreements, reverts to the EDA, which is currently the ground owner.

This is a very complex project with multiple agreements and bonds.  It is the goal of this unwinding to ensure that the property continues to be an important asset to downtown while providing affordable senior housing while making the development fiscally viable in the long term.

Currently, the city has a bond on the commercial portion that should be paid off in 2023.  That bond is being paid from revenue from the Master Tenant's rent, which comes from the current multiple sub-tenants.  The current Master Tenant agreement calls for these lease payments through 2025, which under the original bonds is when the bonds would be paid off.  The bonds were refinanced and now will be paid off early.

The EDA would have outside counsel review the existing two Master Leases and existing tenant leases and propose a structure back to the EDA and the CDA.  The attorneys would also develop a template lease for the spaces.  Currently, leases are from a few pages to many and the rent spread is as much as $7 per square foot among tenants.

The goal would be to locate tenants that can activate the space and generate pedestrian traffic for all of downtown.

The EDA will also be receiving a proposal from RSP, an architectural firm that works on the repositioning of developments.  While architecture is the foundation of their practice, RSP has evolved to include services like branded environments and urban design.  Their firm has revitalized a number of projects around the country including Target on State Street in Chicago to reimaging the Fleet Farm brand and stores. They were the planners and architects for City Place in Woodbury in cooperation with Kraus Anderson and Elion Partners. While RSP has locations around the globe, their global headquarters is in Minneapolis.  

Funds for improvements may be able to come out of current Tax Increment Reserves.  

Staff will be working with our consultants to prepare a revitalization plan for the commercial area along with a cash flow analysis and recommended strategy once all of the various leases and agreements have been reviewed by outside counsel. Once prepared, we will present a proposal back to the EDA.