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Our Assign: To work together to responsibly grow our conununity, and to provie quality, cost-effective, an efficient government services HRA Regular Session Meeting Date: 01/28/2014 Submitted For: Patrick Brama, Administrative Services By: Patrick Brama, Administrative Services Information Title: Approve Real Estate Broker Services Contract with CBRE and Phase One Property Listing 5. 1. Purpose/Background: **This case is identical to the case included in the City Council regular meeting** **This contract also requires approval from the Ramsey HRA—Technically, the Ramsey HRA owns a number ofproperties to be listed** Purpose of Case: The purpose of this case is to approve two items: 1. Professional Services Agreement with CBRE (listing agreement) ("Contract") 2. Inventory of land (included in phase 1 listing agreement) Background: The City of Ramsey owns a large inventory of developable land available for purchase by the private sector. In an effort to reduce the number of tax exempt parcels in the Ramsey, and encourage private market development, the City Council has identified the sale of developable City owned land a priority. Recently, the City Council directed Staff to work with CBRE to negotiate a contract for professional real estate broker services to facilitate the sale of City owned land. Outcome: Decreased inventory of tax exempt properties owned by the City of Ramsey. Private market investment and development in Ramsey. Notification: NA Observations/Alternatives: Contract Highlights: *After one year, three month notice early termination clause (three year contract) * 5% commission fee (7% co -broker) *After termination of contract, six month carry-over period (for commission) *No penalty for pulling properties from listing agreement (cancelation fees) *No upfront fees (standard signs, marketing, research) *Minimum commission fees on office/industrial sales ($2.00 per sq. ft. min. sale price) Case Update: This case was originally reviewed by the City Council on Tuesday, January 7 in Worksession. At said meeting, the Council requested various changes be made to the proposed contract, as described below. (A) A request was made to move several single family residential parcels from the phase two property listings document to the phase one property listings document. This request was completed and is reflected in the updated contract. (B) A request was made to develop an "owner prospect list" to be included in the proposed contract. The purpose of the "owner prospect list" was eliminate payment of commissions to the broker (CBRE) for sales signed with prospects the City is currently working with --in other words, not developed by the Broker. CBRE was amenable to the City's request --see paragraph five and Appendix B for details. In summary, CBRE will not receive commission fees on deals signed within the first six months of this contract --with City developed prospects. The above terms were discussed among the City's development team and City Attorney. Staff believes the proposed terms are fair and acceptable. Timeframe: Staff will bring back a subsequent case to discuss pricing strategy (February 11 CCRS). Upon adopting pricing strategy, all City owned properties outlined in this contract will go to market. Looking forward, Staff will also bring back a case in the next 2-3 months to discuss "Phase 2" listings (see attached). Attachments: Professional Services Agreement CBRE Phase 1 Listings (included in first contract) Phase 2 Listings (not included in first contract, future date) CBRE Proposal and Resumes