Agenda - Council - 01/28/2014 - Laserfiche WebLink

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Councilmember LeTourneau stated he is more concerned about calling out only the known buyers and agreed with letting the others go to the broker as Phase 1. Economic Development Manager LaFrance stated the other part of the conversation is to gather additional information on Phase 2 properties and then forwarding those properties to the broker. Assistant to the City Administrator Brama stated the concern is whether it is worth potentially paying commission on a sale that the City could have sold internally. Councilmember LeTourneau stated he thinks the opportunity cost is worth the risk, as the City is not enjoying its attempt to sell this property. Councilmember Tossey agreed and noted the City has tried for years but does not know how to sell this property. Councilmember Kuzma suggested identifying any clear-cut prospect and then selling everything. Mayor Strommen noted there are Phase 2 parcels that need additional due diligence prior to turning over to the broker. The consensus of the Council was to direct staff to prepare an addendum outlining the City contact list for inclusion in the listing agreement. Consensus was also reached to approve listing Phase 1 properties including the Windsorwood property located in northwest Ramsey, 6203 Rivlyn Avenue, and North Commons residential sites. Phase 2 properties include the former Ramsey Municipal Center, Hageman Holdings property, and Listing 45 property. Assistant to the City Administrator Brama described the terms as contained within the contract, noting it includes a schedule of land sale commissions. He explained a revision made to the language relating to sale of office/industrial land to apply a land value of $2/square foot value and then apply CBRE's commission to it. He indicated these agreements will be revised as directed by the Council and placed on the Council's Consent Agenda of January 14, 2013. Assistant to the City Administrator Brama stated staff will bring back a subsequent case to discuss pricing strategy on January 28, 2014. It was noted there will be a "meet and greet" session with CBRE prior to the January 14, 2013, Council meeting. Councilmember Riley asked whether the City is positioned to negotiate minimum fees, noting there is potential to pay 10% on some of the residential land (Windsorwood). He also asked about earnest money and if it reflected standard real estate terms. Assistant to the City Administrator Brama stated there are minimum fees for sale of residential parcels because the value of that type of property is relatively low. Thus, the standard commission does not yield a profit for private firms. He explained that originally it was proposed to be a straight minimum of $5,000 and staff negotiated a lower benchmark. However, if the Council finds the rates to be too generous, staff could renegotiate a lower rate. With regard City Council Work Session / January 7, 2014 Page 10 of 13