Minutes - Council Work Session - 01/21/2014

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City Administrator Ulrich stated there is currently a large inventory of surplus land available for sale in Ramsey. He added the proposed contract with CBRE stipulates 5 -7% compensation for sale of land. He noted that the existing contract with Landform may require the City to pay compensation on development capital costs. City Administrator Ulrich stated Landform's contract was terminated in March 2013, but a carry- over clause requires that the City pays Landform full compensation through July 1, 2014. He added, therefore, it is possible that the City could be obliged to pay two compensations through that date. He noted the Councilmembers had received a copy of a letter from real estate attorney Tom Bray with his opinion on this case. City Administrator Ulrich stated the implications of the Landform contract should be implicitly understood before entering into a separate contract with CBRE. He requested the City Council's guidance and direction as to whether the City should move forward with the CBRE contract. He added staff had produced mock scenarios for the Council's review and discussion. City Administrator Ulrich stated the City Council should review the issue, including amount, frequency, and timing of land sales over the past two years, and project that forward. He added, in that light, the City's risk of paying compensation is relatively low. He added the City can then proceed in good faith, and make the best effort to sell property with normal market conditions. Councilmember Kuzma asked whether any potential contract must be signed by July 1, 2014, and if the City is engaged in preliminary sale activity at that time but there is no signed contract, whether the multiple compensations would apply. City Administrator Ulrich stated the trigger is a signed contract. Councilmember Backous requested clarification regarding the timeframe in which the City will engage the proposed broker. Assistant to the City Administrator Brama stated the City could wait until after July 1 to engage their services. Councilmember Backous stated he would not mind paying two compensation fees in order to sell property, especially if a sale is completed by July 2, which means it was done quickly. Councilmember Riley stated the City should not stop or wait until after July 1, as that would not be acting in good faith. He added the City knew about this arrangement, and it is important to make a decision in view of the two compensations. Councilmember LeTourneau agreed, adding the end result is to return property to the tax role, and in any case, there will be a net gain. City Council Work Session / January 21, 2014 Page 5 of 11