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FOR IMMEDIATE RELEASE Contact: Kurt Ulrich • March 18, 2009 City Administrator 763-433-9845 kulrich@ci.ramsey.mn.us CITY OF RAMSEY SETTLES LAWSUIT AND PLANS TO PURCHASE RAMSEY TOWN CENTER PROPERTY Actions will free up project for future development, protect taxpayers RAMSEY, Minn. — The Ramsey City Council has authorized settlement of the protracted litigation involving the Ramsey Town Center project, and the purchase of 150 acres of undeveloped property to free it from foreclosure, protect the city's infrastructure investments and position the project for additional private development. Ramsey Town Center, since its inception, has been a private development, but the project stalled in 2006 after the death and bankruptcy of its owner and developer. Since that time, the undeveloped portion of the 322-acre mixed -use development has moved into foreclosure involving 25 banks. Due to the complexity of the foreclosure, it has been difficult to attract new developers into the project. "Regardless of the past history of this project, our citizens expect us to change its course and position this important section of our city for a successful future," said Mayor Bob Ramsey. 'With the city's action, we ensure there is opportunity for private entities to develop our Town Center and protect the city's previous investments." The city plans to purchase the 150 acres for $6.75 million. The current lenders would then pay $1.35 million owed in back taxes, interest and penalties to the city, county and school district. In addition, the city plans to utilize $1.5 million in proceeds from a previous letter of credit for the development. The cost of the transaction is a fraction of. the current mortgage amount of $35 million. The city will finance the purchase through internal borrowing, allowing it to complete the purchase without accumulating additional debt or strapping city finances. In return, the city will receive a clear and marketable title to the 159 acres. The council's action, also will: • Result in a settlement that ends litigation between the city and lead bank • Allow the community to recoup back taxes, interest and penalties, and avoid forfeiture of future taxes starting in 2010. • Free the property for private development • Allow the city to re -shape future development of Town Center in a manner that is market -driven and meets community needs • Accelerate the opportunity to grow the tax base • Protect the community's infrastructure investments "The city council's decision to buy the remaining parcels of Ramsey Town Center is a smart investment," said Ramsey City Council Member David Elvig. "It's a buyer's market and this property is a great value. We need to protect the investments the city and its regional partners have already made in the project." - More - 29