Agenda - Council - 01/08/2008 - Laserfiche WebLink

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CASE # r I APPROVE PURCHASE AGREEMENT AMENDMENT AND LOAN AGREEMENT AMENDMENT FOR THE PURCHASE OF PROPERTY LOCATED IN THE HIGHWAY 10 CORRIDOR By: William K. Goodrich, City Attorney Background: As the Council is aware, the City entered into a purchase agreement with Douglas and Julieann Hills for the acquisition of their parcel of land lying within the Highway 10 corridor Official Map area. This action was authorized at the City Council's meeting on December 12,2006. The parcel is located at 7443/7445 Highway 10 NW and is approximately 3.4 acres in size. The property is occupied by a residence and two car repair/sales business tenants. The funds for the purchase are from the Metropolitan Council RALF loan program. The loan proceeds will be reimbursed to the Metropolitan Council by MnDot when MnDot has need for the parcel. Jodi Ruhle of the Tinklenberg Group negotiated the purchase agreement on behalf of the City. The negotiated amount and appraised value is $1,160,000.00 or approximately $7.83/sq. ft. A Loan Agreement between the Metropolitan Council and the City was also approved on December 12,2006. While the actual appraised value of the subject property is $1,160,000.00, the total loan from the Metropolitan Council will be $1,229,000.00. The additional $69,000.00 will be to defray the City's acquisition costs and the residential relocation expenses The original closing date was scheduled for January 8, 2007. Because of environmental issues with the parcel and legal description issues, the closing was delayed. The closing is now scheduled for January 31, 2008. This is the reason for the Purchase Agreement Amendment. In addition, the loan amount has been amended to more accurately reflect the residential relocation expenses and the City's acquisition costs. Finally, the City is responsible for the relocation expenses related to relocating the two car repair/sales business tenants located on the parcel. The City's relocation expert, Dan Wilson, estimates these expenses to range from $45,000.00 to $65,000.00. These relocation expenses need to be paid by the City and will be repaid to the City at the time MnDot acquires the parcel. Staff is preparing to negotiate with the Met Council to obtain proceeds from other RALF acquired parcels to help the City defray these relocation expenses. Enclosure: Map showing the parcel location Recommendation: Approve an amendment to the purchase agreement changing the closing date and approve the amended Loan Agreement increasing the loan amount to $1,229,000.00. Council Action: Motion to approve the purchase agreement amendment in order to change the closing date, which purchase agreement is with Douglas and Julieann Hills for the purchase of the parcel ofland located at 7443/7445 Highway 10 NW, Ramsey, Minnesota, for a total purchase price of $1,160,000.00 which amount is to be funded by Metropolitan Council RALF loan.