Agenda - Council - 09/09/1996 - Laserfiche WebLink

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I I I I I I I I I CASE # UPDATE ON LANDMARK BANK DEVELOPMENT AGREEMENT By: Ryan R. Schroeder, City Administrator Background: At the last Cotmcil meeting, several questions were asked by a Ramsey resident about the Landmark Bank development agreement. It was asserted, through this questioning, that the bank had reCeived consideration from the City for which it was not entitled or should not have been afforded. The price of the land and the process followed was initially questioned. When the City gained control ;of the new public works facility, the land became available. Council was informed that ~e had come upon a buyer for the property. Council directed that an appraisal be g~ned on the property. The City entered into a development and purchase agreement in ~e amount of the appraisal. At the time the appraisal was completed, a land sale had not occurred on T.H. #47 in this area since the 1980's. The SuperAmerica property sale Was pending but the purchase price was not yet known. (It ended up to be under $3/foot.)i The property just to the north of this parcel had been listed for over a year at $2/foot and had not had any offers. Property had just sold at Highway #10 and Sunfish Lake Boulevard at $1.03/foot. Industrial park land in Anoka was appraised at $1.35/foot and the AEC iqdustrial park land was adjudged by the owner to be worth $0.65/foot. We listed our industrial park land at between $0.85 and SI/foot. We agreed to sell the bahk site at $2.30/foot fdr 34,784 feet, plus the expense incurred for construction managemeht of the Old Town Hall!property (at no cost to the City). The bank is also relegated to an expense for a 300 foot f'a:ontage road at a cost of $20,000 to $30,000 for their portion. Part of the fer?r behind the sale price seems to be a recent sale on the eastern side of T.H. #47. Initially, !t would be expected that property on that side of the highway will sell for more in that iti is the homeward bound side of the street. (This is also why that side developed first,) Second, the sale most often quoted was not an arms length transaction and the seller continues to be an owner of the business at that location. Given the above, I am comfortable~ that the purchase price was appropriate. The process used at the time was the same as was in use for other development activities. Council 'has since provided direction that f~ture non-industrial parcels follow a published notice process. It was also suggested that the City does not have control of the development process within this project. Tl~at is not accurate. Under 2.1.m and n of the development agreement, any improvements must be agreed to by the City and itemized invoices must be approved by the City. Council hadr previously been informed that bids would be taken on a project phasing process. At th~time of preparation of this material, the bids have not been received. The concept bid sp~ is enclosed for your information. The intent is that when the bids are in, Council will pick and choose which portion of the project will be completed (if any). It was suggested that the City does not have sufficient security in this project. This also is not accurate. As in all of our development projects we take a lien against the parcel in the amount of our exposure. In this case, the lien is in the amount of $118,000. This lien exists by development agreement and by attachment. It is signed by the bank. It was suggested that we inappropriately extended utilities to the property. According to subdivision regulations, it is the City responsibility to provide for trunk extensions of utilities. It is tlie owner responsibility to provide for connection from his property line. This project is the same as that process.