Jaguar/ Land Rover, What to Know

Cushman & Wakefield White Paper on Real Estate Market
Prepared by:
Jon Rausch
Executive Director Land Services, Cushman & Wakefield
With Input from Opus; CSM Hospitality; CBRE Multi-Family Experts; Cushman & Wakefield Hospitality Leader

Site Overview
The Adler Site is a 3.2 acre parcel, relatively small for freeway redevelopment opportunities and a very expensive
piece of land. The Site is only 300 feet wide (east to west) and 385 feet deep (north to south). The Site is bounded
by 77th Street on the north, 78th Street on the south, Bloomington Avenue on the west and a small commercial
building directly adjacent to the east. To compound the obvious Site challenges, the north side of 77th Street is
screened off entirely from the residential properties to the north. This dramatically impedes pedestrian traffic
to the area. The ability of a developer to accomplish a major mixed-use development to the magnitude of the
2005 Comprehensive Plan rendering will be a challenge, unless there is a significant taking by the City to cluster
the development. The site is too long and linear, it does not provide for an efficient walkable mixed use
development. Due to the fact that it is bound by the interstate, it is better served as a regional destination.
Beyond the obvious Site constraints, traffic flow is a major obstacle (see Exhibit A). Current traffic volumes
along 77th Street are only approximately 2,200 trips per day according to MNDOT’s traffic data. If the underpass
to the east side of Cedar Avenue is constructed, it will connect to a major airport industrial area and the
Humphrey airport terminal. This connection will not, in our opinion, generate enough local traffic volumes
necessary to support a bona fide mixed-use development. The concern of most multi-family and retail
developers will be the amount of truck traffic that will choose to use this route to Portland Avenue.
Finally, the Site is situated toward the east end of the existing 77th Street corridor. In addition to observing
virtually no pedestrian traffic on adjacent sidewalks (other than those occupying the apartment complex to the
west) the relatively distant connection to a major freeway connection at 12th Avenue is a significant negative
factor for any potential hospitality or retail developer.
Would a mixed use project be viable for the Adler site?
Modern mixed-use projects are typically Live-Work-Play developments and occupy a large contiguous area in a
cluster configuration rather than a long, linear configuration. These developments will typically require 15-50
acres, and are anchored by a full-service grocery, theater, restaurants, mall or similar destination use. It is
essential that they have excellent access to a major street corridor. Examples in the area include PennAmerican
(Fresh Thyme) and Promenade (Whole Foods). Due to the severe constraints of the Adler site, it is our opinion
that a mixed-use development will be difficult to achieve in this location, even if we assume one developer could
secure site control over adjacent properties directly east and west. We have directly discussed the potential
purchase of the adjacent parcels in response to City requests; the respective owners are not interested in selling
or are asking for a sale price well beyond what is being offered to the owner of the Adler Site. In any event, local
traffic patterns and traffic volumes do not support destination retail.
Would an industrial use work for the Adler site?
The Adler Site is not zoned properly for any industrial use. Moreover, the same Site constraint limitations noted
above severely limit the ability to develop any viable industrial use on the Site. Moreover, land values in
Richfield are too high to support industrial along 1-494. Atypical industrial site sells for $5.00 – $6.00 PSF ($200,000 – $250,000 per acre). Most of the land along the Interstate is worth $25.00 – $40.00 PSF ($1,000,000
– $1,500,000 per acre). Industrial use would not be viable on the Site, in our opinion.

What about apartments for the Adler site?
We have witnessed some affordable housing project interest in the area, but those developments are typically
awarded tax credits or some other form of public subsidy to overcome high land prices. In addition, the average
apartment rents in Richfield are well below the threshold that will support new market rate construction, unless
the project is heavily subsidized by the City. To make new construction numbers work, rent numbers need to be
greater than $1.85 per rentable square foot per month. The rents along the 1-494 corridor currently average
$1.26 PSF (calculated as PSF per month).
We’ve confirmed this view with a number of market rate developers and leading apartment experts in our area.
Developers building to $2.00 PSF (+ rents) will only build where grocery, walkable shopping and entertainment
exist. Apartment developers are willing to pay $12.00 – $24.00 PSF for premium sites but only if they can get the
necessary rents. This does not appear to be viable at this time.

Would a business class hotel be a viable use?
We feel that severe Site constraints, coupled with surface parking needs, will make it very difficult to build a
quality business-class hotel on or near the Site. The constricted land area in the corridor would restrict parking
spaces (likely requiring structured parking at $20-25,000 per stall), and, therefore, limit the number of rooms,
amenities and ultimately rents. Additionally, a hotel developer will only pay $15.00 – $20.00 PSF for a site, which
is substantially below the market value of land along the corridor. Additionally, the market is saturated for this
type of hotel. JW Marriot and others have taken up the market demand.

The 77th Street Underpass
The 77th street underpass will likely increase traffic along 77th Street for airport-based freight forwarders,
residents of Richfield driving to the Humphrey Terminal, Holiday gas station or the Fort Snelling Cemetery.
Current traffic volumes on 77th Street are approximately 2,200 trips per day; projected future traffic after the
underpass is constructed maybe 10,900 trips per day, with projections increasing to 13,850 by 2034 (see Exhibit
A). The underpass will not, by itself, materially alter traffic volumes along 77th Street and will not support a
mixed-use or similar destination retail project of the type and scale developers would be willing to bet on (see
Exhibit A).
Impact on City tax base? (Exhibit B)
Currently, as a non-profit, the Adler Academy does not generate any property tax revenue to the City. If Adler
wanted to do so, it could sell its property to another non-profit who could occupy it as-is. Another school or
church would likely be the best fit but they would be faced with the high cost of land and any necessary costs for
structural improvements to the building.
We have analyzed numerous other dealerships and feel that the proposed tax base from Morrie’s will create
nearly $750,000 in additional tax revenue. This will be on par with some of the highest valued properties along
the southern corridor of Richfield (see Exhibit B).

Conclusion
To help support our conclusions regarding the Adler Site, we contacted numerous potential partners to establish
a mixed use facility. These included national convenience retail uses, such as coffee shops, as well as local
boutique retail uses. The response was uniformly the same: very low traffic volumes and the high cost of land
render these options unfeasible at the Site.
In summary, we feel that a high quality innovative, state-of-the-art Jaguar Land Rover Development will provide
the neighbors and future tenants will provide a high level of security and assurance that this area is viable for
more development. Jaguar Land Rover will implement state-of-the-art “green practices” including electronic
solar charging stations.

Highest regards,
Jon Rausch CCIM, SIOR
Executive Director and Founder of Twin Cities Land Services Practice Group
Community Initiatives
• A portion of our Buy Happy Giving Budget will be specifically
dedicated to the Richfield Community. We would look to the Chamber
of Commerce or the City Council for guidance as to what partner
would be best suited to work with us.
• We will provide the utilization of our conference room two nights per
week for community groups looking for a space to gather.
• We will create one position through Cristo-Rey specifically dedicated
to students from Richfield. These positions are shared by 4 students
and operate under the structure designed by CR. They provide on the
job experiential training for students. CR does have students from
Richfield attending their school. CR has a structured model that
provides tuition for the students, on the job education, and bright
young committed workers for businesses.
• We will work with Richfield high schools to provide two $2000
scholarships to HS students interested in going into fields related to
the automotive space. Students interested in sales and marketing,
accounting, finance, trades such as auto technicians, and general
business would qualify. We could target minority students if that
proves to be the best option. We will need to structure the details of
program.
• We will offer two summer internships to Richfield HS students or
college students from Richfield. These will be full-time or part-time
positions, depending on the students’ needs and capabilities.
• We will offer to speak to HS students and/or present in a classroom
setting, addressing topics related to our space such as marketing,
career planning, tech training, and general “how does business work”
sessions. I have personally worked with St. Thomas MBA classes on
similar sessions. The engagement is typically beneficial to all parties
as it promotes real life discussions and provides insights into the
workplace.
• Jobs… We will bring to Richfield 65 new jobs and perhaps more.
These positions typically pay above median income scales. These are
not coffee shop or retail positions without benefits or career paths.
• We would be willing to partner with Richfield by providing a 3-4-year
lease of one new I-Pace, Jaguars first fully electric SUV that should hit
the market next year. The vehicle could be used to promote clean
energy within the city.
• Every Morrie’s full-time employee is paid 2 days per year to
volunteer within their communities. We can commit to at least ten
days per year specifically in Richfield. Again, we will need direction
from the Mayor’s office on this execution.
• We currently provide tuition reimbursement to any qualified student
pursuing a career as an automotive mechanical or body technician.
We pay $1500 per semester. In working with the schools in Richfield,
we could highlight this program in addition to the aforementioned
scholarship programs.
• This new JLR facility is one of only a handful of the new “arch”
designs in the country. The architecture is stunning. The facility
would provide a landmark within the community that the people of
Richfield could be proud of. Nearly every design element inside and
out is unique, from the detail of the front glass to the combination of
building materials utilized in the construction. The high rising
curtain wall is particularly unique in design and appearance.
• Having a luxury center in a community adds credibility and draws
interest, both from inside the market and into the surrounding
communities. We find that people will come and visit our luxury
stores whether they are customers or not. Many times, we have
fathers coming in and showing their sons and daughters the cool
cars. People come in to not only buy and use our service facilities,
but to peruse the new technologies and dream a little bit. It is like a
mini-auto show at times. The vehicles are interesting, innovative
and beautiful.
• Many urban areas specifically target luxury automotive retailers to
establish a point in the heart of the city. Aston Martin in Chicago.
Bentley Gold Coast in Chicago. Maserati, Ferrari, Mercedes Benz, JLR,
and others are in Manhattan or looking to go there. Los Gatos has
several luxury brands in the heart of their shopping areas. The
vehicles and the stores attract people. The cars are cool. The
facilities are amazing places to browse. As the area develops, this
store could be a cool destination anchor.
• JLR as a brand is committed to electrification of their vehicle lines.
JLR has an all-new fully electric SUV coming to market next year,
further they have committed to having a fully electric or
electric/hybrid option in each vehicle line by 2020. The new Arch
facility has more electric charging stations than any other facility we
have built to date. The stations are prominently displayed in the
Facility Innovation front of the dealership. We also have solar charging stations planned
as well.
• Tax revenue. Simply stated we bring millions in tax revenue over
time.
This business, this dealership will add great value to the Richfield community. The
facility is unique and innovative. And we as Morrie’s always support our
communities with people, jobs, resources, and money that help the community grow
with us.

Exhibit A Jill. CUSHMAN & WAKEFIELD
Morrie’s Richfield Site/Mixed-Use Comparison
MIXED-USE DEVELOPMENTS
TOTAL LOCAL TRAFFIC COUNT
VEHICLES PER DAY
50th & France
Edina, MN
26,900
50th St & France Ave
The Galleria
Edina, MN
49,300
70th St & France Ave
Ridgedale
Minnetonka, MN
33,400
Plymouth Rd & Ridgedale Dr
Excelsior & Grand
St. Louis Park, MN
28,900
Excelsior Blvd & Monterey Dr
West End
St. Louis Park, MN
25,100
Cedar Lake Rd & Park Place Blvd
Adler Site LTD ‘.7050
: 77th St & 12th Ave
Source: U.S. Census Bureau, Census 2010 Data, Axiometrics – apartment data based on their own submarkets.
Below are the daily traffic projections (Average Annual Daily Traffic – “AADT”) at the 77th
Street underpass, as well as recent existing counts from MnDOT.
AADT With Underpass
2019 (Base Year) 10,900 trips per day
2034 (Forecast) 13,850 trips per day
Existing AADT (From MnDOT)
2014 (East of Bloomington) 1,700 trips per day
2013 (West of Bloomington) 2,200 trips per day
17 Open Items to Meet CUP Conditions
Condition Met Condition?
1. Minimum 15-foot buffer to separate auto sales uses from all other parcels (537.05, Subd. 6);
Yes
Plans have been revised to meet the 15’ buffer requirement.
2. Parking structures do not count toward minimum building height of two stories; second level entirely parking (537.07);
Yes, Second floor showroom and office space have been added to meet this requirement.
3. Minimum building coverage of 50 percent; proposed 39
percent (537.07);
Similar, non compliance, projectHl Audi was approved at 29%. We proposed 41.9%. 8.1% short, so we ask for this variance.
4. Maximum impervious surface is 85 percent; proposed 89%, existing 75% (537.07);
5. Minimum 5 percent usable open space; none proposed;
6. Minimum 60 percent “street level active use” required (uses that provide a significant level of pedestrian
activity); none proposed (537.07);
7. Maximum rear setback is 15 feet; 37.4 feet proposed (537.07)
Yes, Permeable pavers have been added to the site plan. This reduces the impervious coverage to 85%.
Yes, A linear pedestrian greenway is proposed to connect 77th Street to 78th Street along the east side of
the property meeting the 5% usable open space requirement.
Similar non-compliance as Audi project
Trailhead connection between 77th and 78th street has been added to increase the active use.
Similar non-compliance as Audi project
The proposed setback is similar to the Audi building that was approved.
8. Minimum 15-foot landscape buffer along I-494 required; 3 feet proposed (537.07);
9. Parking lot screening does not met requirements (54.03, Subd. 7);
10. Maximum allowable parking exceeds. Only permitted if impervious surface requirements can be met(not met,
see above) (54.13);
11. Principal entrances should be architecturally emphasized and visible from the street (537.1);
12. Changes in relief required along 15 percent of building on street sides. Long unbroken walls not permitted (537.1);
13. Ground floor windows required along street sides of building (537.1);
14. Pedestrian connections and circulation does not meet minimum requirements (537.1 and 54.15);
Similar non-compliance as Audi project, Our landscape buffer is 6.3 feet.
Audi was approved at 5 feet.
Yes
The Landscape Plan has been revised to meet this requirement.
Yes
Impervious surface requirements have been revised to be met.
Parking has been reduced to meet 110% of the required parking stalls. (276 maximum)
Yes
Principal entry is emphasized by different material and offset plane.
Yes
This requirement is met by current design. Code calls for 15% relief on all street sides the current design has 24% relief at Bloomington, 24% at 77th street, and 22% at 78th street.
Yes
Ground floor windows have been added at all street sides of the building.
Yes
Sidewalk connections from 77th
Street to 78th Street have been added on the east side of the site and on the west side of the site along Bloomington Avenue.
15. Bicycle parking required (54.17); Yes
A bike rack has been added to meet this requirement.
16. Sidewalks required along all rights-of-way (537.1, Subd. 8)
Yes, A sidewalk has been added along Bloomington Avenue.
17. Lighting levels exceed allowable limits (54.09). Yes, Lighting levels have been revised to that of what was approved at the Audi facility
Summary
Morrie’s Automotive Group, in consultation with Jaguar Land Rover, has designed a multi-story
commercial building that is the practical equivalent of a Class A commercial office building. The building
features four-sided architecture, together with substantially improved landscaping and a trail connecting
77th Street to 78th Street. Any code deviations are driven by the intention to fully utilize the site as the
code allows and in any event mirror those deviations approved for the new Audi dealership location. The
per-square foot investment in the site is substantially higher than other uses along the corridor, including
the adjacent Audi building. The site’s unique L-shape configuration presents practical limitations for any
building design, but Morrie’s has worked creatively to design one that engages the street front at a
pedestrian scale while also presenting an attractive “front door” to the motoring public on I-494.

MORRIE’S AUTOMOTIVE GROUP
BUY HAPPY*
Phone: 952-544-0376
morries.com
1 2520 Wayzata Boulevard
Minnetonka, MN 55305
Richfield JLR Community Initiatives and JLR Facility Highlights