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HRA Work Session Date: 04/05/2011 By: Darren Lazan Administrative Services Information Title: Consider Extension to Purchase Agreement — Suite Living Item #: 6. 1. Background: The HRA and Toti Development (Suite Living) entered into a purchase agreement in September of 2010 for a 1.8 acre parcel west of the existing parking structure. As the contract has progressed, both parties have fulfilled many of the terms of the agreement including the due diligence, all title and survey work, and Toti has accepted the Special Services District language as required under the agreement. Toti has completed all of their entitlements necessary to close. As written, the contract required Toti to close on the property on or before March 31, 2011 or exercise their right to extend as outlined in the contract. They currently have the right to extend the closing date through a series of extensions until September 30, 2011. As part of those options to extend, the seller was to deliver an additional $25,000 hard earnest money to the title company, and pay an additional fee each month of the extension. Toti has been working with their development and financing partner to assemble construction package and close on the property. They contend they have incurred additional costs in preparing this new urban prototype plan and request relief from the additional $25,000 earnest monies to extend the agreement. Observations: Toti has prepared and presented a reinstatement of, and amendment to the purchase agreement for your consideration. The Development Management team has worked through the related issues and negotiated the following terms; 1. The closing date shall be amended from March 31, 2011 to August 15, 2011. 2. No additional earnest money will be delivered to the seller. 3. The buyer will affirm that the existing $50,000 is non - refundable and release it to the City. 4. The Buyer will pay a monthly extension fee of $5,000 until they close. Recommendation: The DM team recommends the HRA accept the proposed amendment as negotiated and direct staff to prepare and place the final version on the agenda at the next Regular HRA meeting. Funding Source: There are no fiscal impacts related to this amendment, however, if accepted the HRA will be foregoing the additional $25,000 in earnest monies in exchange for receiving the existing $50,000 and an acknowledgment that these monies are non - refundable except in the event of an HRA default. Council Action: