Agenda - Council - 03/26/2013 - Laserfiche WebLink

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CC Regular Session 7. 4. Meeting Date: 03/26/2013 Submitted For: Patrick Brama By: Patrick Brama, Administrative Services Information Title: Consider Offer to Purchase City Owned Property Located at 14280 Azurite Street NW (PORTIONS MAY BE CLOSED TO THE PUBLIC) Background: The City owns property located at 14280 Azurite Street NW ("Subject Property"). The Subject property is 4.8 acres in size, is located on the north side of Bunker Lake Boulevard adjacent to MultiSource Manufacturing and Diamond Graphics. The Subject Property is zoned Employment 1 (El) and is available for sale. The City received an inquiry from a Diamond Graphics, Inc. regarding the Subject Property in early January 2013. Staff met with said prospect on January 11, 2013 to discuss the Subject Property. Subsequent to meeting with Diamond Graphics representatives, Staff ordered a market appraisal on the Subject Property. Staff contacted the prospect on February 15, 2013 indicating the City's position and the result of the market appraisal ($420,000 valuation). Diamond Graphics, Inc. made an offer to purchase the Subject Property on February 28, 2013. The City Council reviewed said offer on March 12, 2013; at which time, the Council proposed a counter offer. On March 18, 2013 the City received correspondence from Diamond Graphics indicating they agreed to a sale price of $410,000 to purchase the Subject Property. Purpose of case: 1. Approve the sale of the Subject Property to Diamond Graphics, Inc. for $410,000 2. Introduce an ordinance to sell surplus city owned land 3. Direct Staff to work with Diamond Graphics to draft a purchase agreement and to schedule a closing date 4. Identify available uses of land sale proceeds Notification: Observations/Alternatives: The appraised value of the Subject Property is $420,000. Based on the City's adopted Business Subsidy Policy, any discount in land value greater than $25,000 would be considered a "Business Subsidy." In which case, certain filing and reporting with the State of Minnesota would be required; and potentially, an agreement, for job creation and/or retention would need to be established. Staff would be required to work with the prospect annually to complete required reporting to the State of Minnesota. Use of Proceeds: The Subject Property is located in former TIF District 10; and was purchased with proceeds from TIF District 1. Both TIF Districts 10 and 1 are now decertified. However, because the Subject Property was purchased with funds from TIF District 1, all proceeds must be applied to eligible TIF expenses. For example, roads, utilities, demolition or land acquisition. TIF district 1 and 10 are sub -districts located within a larger umbrella TIF 'Development' district, known as a Project Area. The $410,000 in proceeds can be spent within the approved Project Area. In summary, the Project Area is located south of Alpine Drive across the entire City.