Anderson-KM gets TIF help with home base - Finance & Commerce

Posted: 3:43 pm Tue, January 24, 2012
By Matt M.?Johnson
Tags: Anderson-KM, KM Building Co., St. Louis Park, tax increment financing

Designed to fit in with a neighboring, 16,500 square-foot building erected by Anderson-KM partner Greg Anderson in the early 2000s, Oak Hill II will both home to the construction company, but to office tenants as well. (Staff photo: Bill Klotz)

Avoiding a fate similar to that of the cobbler?s children, a St. Louis Park construction company will put as much into the appearance of its new $3.5 million office building as it does into client projects.

And the city is going to help.

Last week, the St. Louis City Council unanimously approved a measure that will put $300,000 of tax increment financing (TIF) money into the Anderson-KM Companies? 21,450-square-foot building in the city?s Lenox neighborhood.

Once complete, the brick-faced multitenant space will not only be home to the construction company, but will also continue the redevelopment of an aging commercial area near the corner of Highway 7 and Louisiana Avenue.

Called ?Oak Hill II,? the building will be built on a 35,000-square-foot corner lot adjacent to the multitenant, strip commercial Oak Hill building Anderson Builders erected in the early 2000s. In July, St. Louis Park-based Anderson Builders merged with KM Building Co. in Minneapolis to form Anderson-KM .

In an issue briefing prepared by the city?s economic development coordinator, Greg Hunt, the city estimates the total value of the project at $4.3 million. Construction may start as early as summer.

Noting that some of this value comes from ?other economic benefits derived from the proposed development,? the document supports the creation of a TIF district to help pay for demolition and development costs at the hillside site.

?The project is not economically feasible without some public financial assistance,? Hunt wrote.

Anderson Builders demolished a former commercial building on the site in 2007.

The remainder of the $3.5 million in construction costs will be bank financed. Carlson said bringing an additional tenant into the two-story building will be a condition for any loan. The TIF financing, he said, will make up for ?high redevelopment costs.?

?Their participation helps,? he said of the city.

Members of St. Louis Park?s community development staff did not return phone calls seeking comment.

Currently working out of a single, 7,500-square-foot St. Louis Park office, Anderson-KM needs more space. Carlson expects the company to add about a half-dozen employees to its workforce of 26. He could not say how long it would take to add those employees.

?We?re seeing an increase in activity,? he said of the construction market.

The merged company announced last week that it is providing development services for a new, $15 million manufacturing plant in Shakopee. Last summer, it pitched building 200,000 square feet of industrial space in Brooklyn Park, and redeveloping the former Midway Chevrolet site on University Avenue into affordable housing.

Anderson-KM will occupy the lower half of the two-story building. It will lease out the remaining 10,716 square feet. Carlson said he hopes to bring medical offices associated with nearby Methodist Hospital into the space. DaVita Dialysis currently leases space in the neighboring Oak Hill building.

While the building is not large, CBRE leasing specialist Dave Marschinke identifies it as a ?Class A? space. Marschinke is seeking leasing clients on Anderson-KM?s behalf.

Both he and Carlson said the neighborhood is redeveloping. Older buildings are being torn down, and St. Louis Park plans to begin construction this year on a new traffic interchange at Highway 7 and Louisiana similar to one finished at Woodard Avenue in 2010.

?It?s a great location,? said Marshinke. ?It?s just old.?

Anderson-KM Companies

Address: 4220 Park Glen Road, St. Louis Park, MN 55416

Future address: 3340 Republic Ave.

CEO: Kent Carlson

Founded: July 2011

Services: Construction, development services, project management,

Employees: 26

Facility size: 7,500

Annual gross: N/A

Website: anderson-km.com

This entry was posted on Tuesday, January 24th, 2012 at 3:43 pm and is filed under Construction & Development, Top Story. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2012/01/anderson-km-gets-tif-help-with-home-base/

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