|
In April of 2009, Landform was awarded a contract to manage the mixed use
<br />development of the Ramsey Town Center. Heidi Nelson, an employee of Ramsey, states
<br />that Landform was retained because of its relationship to Greely, Inc, an Illinois
<br />developer and CrankRe, also of Illinois. Under this contract Landform was paid a
<br />$15,000 monthly fee plus a $10,000 monthly "incentive advancement." The "incentive
<br />advancement" was an advance fee against a 2% commission Landform was to be paid on
<br />any parcel it sold in the Ramsey Town Center, later to be named the COR development
<br />district. The 2% commission was not based on the sale price of the land; rather, it was
<br />based on the total cost of the end use of the parcel. In many cases this means the
<br />commission was far in excess of the standard real estate commission paid on the sale of a
<br />commercial parcel,
<br />On March 22, 2011, the Ramsey HRA approved a new two year contract with Landform,
<br />with the $15,000 fixed fee continuing to be paid and the $10,000 per month incentive fee
<br />being capped at the end of the first year of the renewed contract. As noted above, the
<br />2% commission was paid not only on the acquisition price of the land being sold by the
<br />Ramsey HRA but also on the cost of any improvement being constructed on the site. The
<br />contract staged the payment of the commission, with a percentage paid at the time of the
<br />purchase agreement, a percentage at the closing, and a percentage when there is
<br />occupancy of the site.
<br />In January of 2012, the contract between Landform and Ramsey HRA was amended.
<br />Under the contract, Landform continued to be paid $15,000 per month. The payment of
<br />the 2% commission was deferred, however, with half the 2% commission paid at the time
<br />a purchase agreement is signed and half at the time and public financing on the project is
<br />repaid by the developer.
<br />It is not believed that Landform was involved in any real estate transaction involving the
<br />COR from 2009 through 2011. Accordingly, while Landform was paid approximately
<br />$15,000 per month, or $469,761.59 for services from August of 2009 to March, 2011, it
<br />does not appear any commission was earned by the Company, although it had received
<br />the advance incentive fee. Mr. Lazan, the President of the Company, told ABC
<br />Newspapers that fifteen people at Landform put in 3,300 hours of work during the period
<br />up to March of 2011, receiving approximately $140 per hour.
<br />In October of 2012 Ramsey HRA approved the sale of a 1.36 acre parcel to McDonald's
<br />Corporation for $470,000. Under the terms of the transaction, the HRA will pay
<br />McDonald's realtor a fee of $30,000. It will also pay $51,441 in fees to Landform.
<br />Therefore, on a straight commission basis, the transactional fees amount to $81,441, or
<br />17 V2 % of the sale price, all shouldered by the seller. This does not include the $15,000
<br />monthly fee paid to Landform.
<br />t Sakry, "Landform Works to Grow the COR in Ramsey," ABC Newspaper, December 16, 2010.
<br />2 Sakry, "Ramsey HRA Approves New Landform Contract," ABC Newspapers, March 24, 2011.
<br />3 Sakry, "Ramsey HRA Amends Landform Contract," ABC Newspapers, January 7, 2012.
<br />4 Sakry, "Ramsey HRA Considers the Money Spent on The COR," March 23, 2011
<br />5 Sakry, "Ramsey HRA Approves McDonalds Sale, Landform Fee." October 31, 2012.
<br />2
<br />
|