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City of Morris will negotiate with Riley Bros. Properties on old school property

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News Morris,Minnesota 56267
Morris Sun Tribune
City of Morris will negotiate with Riley Bros. Properties on old school property
Morris Minnesota 607 Pacific Avenue 56267

MORRIS – On Tuesday, the Morris City Council voted unanimously to enter into a negotiation with Riley Bros. Properties over the old elementary school property.


Riley Bros. plans to partner with INH Property Management, a real estate firm based in Waite Park, to develop the property.

On Tuesday, John Riley with Riley Bros. and Mike Stoebe, a partner with INH Property Management, presented the council with some of their ideas for the property.

Stoebe told the council that INH is involved in property management, property development and commercial brokerage. The company manages about 4,000 multifamily apartments and 325,000 square feet of commercial space.

If Riley Bros. purchases the 17.75 acres, INH would represent the company and work to promote and facilitate development, raise investment capital for ventures on the property and handle any “transaction services” that come with the projects, said Stoebe.

The city put out a request for proposals on the property in May. In August, members of the council met with another interested developer, Prairieland Partners, to talk about plans for the property. Steve Schwanke, managing partner with the firm, asked for four to six months to negotiate exclusively with the city on the project. Prairieland Partners indicated they were interested in purchasing between 9.5 and 12 acres of the property to use for a "mix of higher density housing types" for a variety of demographics.

After the presentation in August, the council indicated they would like to hear from Riley Bros. Properties before making a decision.

Stoebe and his partners came to Morris in October to meet with city staff and Riley Bros. to learn about the community and the property. Since then, INH has reached out to three different developers who have expressed interest in the area, but declined to give names or further details.

“We think there’s some good potential with (the property),” said Stoebe. “I would be very much crystal-balling to say precisely what I think that site will look like three, five and 10 years from now but I think it’s safe to say there is development opportunity there.”

Stoebe said some of the housing for the property would require Tax Increment Financing for development, but “what drives the bus on development” is demand and investment resources.

“We find that in working in rural communities, we need public assistance to make things economically feasible,” said Stoebe.

At this point, neither INH or Riley Bros. had a concept plan or drawings for what the site might look like. But Stoebe said he thought it could include student housing, senior housing, general occupancy family housing and a stormwater retention area.

In Riley Bros. original response to the RFP, the company estimated a start date in 2015. Council member Kevin Wohlers asked whether development could start in 2014.

“If the leads that we’re working on now materialize, I think there could be development on that property as early as this summer,” said Stoebe. 

Council member Brian Solvie asked whether Riley Bros. would change their purchase offer on the property. In the original proposal, the company offered $135,000 for the entire 17.75 acre site.

In a memo to the council, City Manager Blaine Hill said he thought proposed price was too low. Hill said he thought the price should be increased to at least $10,000 per acre, about $175,000 total.

Riley told the council he was ready to make an offer on the property, but was not ready to give a dollar amount at the meeting. Riley asked to have a meeting with the city to work out a purchase agreement for the property.

“We certainly would try to get that site start to be developed this summer, that’s for sure,” said Riley. “I can’t promise you that, but that’s what our goal is right now.”

After the presentation, Hill outlined three options to move forward: do nothing and continue to sit on the property, enter into negotiations with Prairieland Partners, or enter into an agreement to meet with Riley Bros.

“For your purposes, you’re selling a piece of land to somebody else who’s going to do the development,” Hill said. “I think what you’ve heard is two concepts and you can make a decision on what you want to do with it and we’ll go from there.”

Wohlers and council member Brian Solvie indicated their support for working with a local developer through Riley Bros. 

“I definitely support working with a local contractor – I have from the very beginning,” said Wohlers.

“I think we have to realize that we’re the seller of the property, not the developer,” added Solvie. “We do want them to get started and develop things, but it is up to them what they want to develop once they buy that property from us.”

Council member Jeff Miller said it is important to keep an open mind through the development, since plans can change as the market dictates.

After a brief discussion, council member Bill Stork moved to enter into a purchase agreement negotiation Riley Bros. properties, which was approved unanimously.

Going forward, Hill will meet with Riley Bros. and INH to come up with an agreement on the property. That agreement will then be brought to the council for final approval. 

Kim Ukura
Kim Ukura has served as the editor of the Morris Sun Tribune since August 2011. She graduated from the University of Minnesota, Morris in 2008 with degrees in English and journalism. She earned a master's degree in journalism from the University of Wisconsin, Madison in 2010. Prior to returning to Morris to work at the Sun Tribune, she worked in trade publishing. She has been recognized by the Minnesota Newspaper Association for both business and public affairs reporting.