Agenda - Economic Development Authority - 10/09/2014

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COR-1 Zoning District. The HRA indicated a change to the City's Zoning Ordinances may change how the HRA would respond to a purchase offer for the subject property. It was requested, a new PA come forward and be considered based on the newly proposed zoning standards RATHER than amending the existing PA; which, was considered and executed based upon on previous zoning standards. In summary, the HRA preferred to review a new PA based on existing market conditions (in this case, the proposed Zoning Amendment). Included in this case are comments from CBRE, the City's real estate broker, related to how the proposed Zoning Amendment would effect the City's adopted pricing strategy for the subject property. In summary, with the proposed zoning amendment in mind, CBRE has indicated the existing pricing strategy for the subject property would not change; and, that the existing offer from PSD LLC is still a fair, market -rate, offer. Notification: Observations/Alternatives: Attached to this case is a new Purchase Agreement. Below is an outline of changes made to the original agreement: 1. Termination and closing dates were changed to May 01, 2015. These changes were made to reflect the proposed project timeline and allow sufficient time for Buyer due -diligence; and, to add consistency with other contingencies outlined in this Purchase Agreement (e.g. F. Government Approvals). Staff did discuss this amendment with CBRE, the City's real estate broker. It was indicated by CBRE, a 6-9 month due -diligence period on a large land transaction is not uncommon in the marketplace. 2. Government Approvals Contingency Updated Previously, this contingency was vague and provided reference to no specific government approvals. As a result, it was unclear what the Buyer's expectations were; and, what specific government approvals would trigger completion of this contingency. This amendment provides clarity within the PA; and allows for a realistic timeline to be established for this contingency to be executed (subsequently, for the PA to be closed). In addition to the items mentioned above, reference to the proposed Zoning Amendment discussed in the background section of this case was added. This Zoning Amendment is being discussed by the Planning Commission on October 09. Details on this case can be found on the published Planning Commission agenda. 3. Project Assistance Notification Section. The Buyer has indicated they would like a clause added to this agreement notifying the City of their position on potential project assistance. The PA currently under consideration by the HRA is a market -rate land transaction requiring no government subsidies or financial assistance. However, the Buyer has indicated, in the future (i.e. outside of this PA) a request for project assistance is a possibility. A potential future project assistance request would be made based off of existing market conditions and project pro forma; which, are unknown today. The Buyer has requested this clause to added to the PA to provide transparency to their position on developing the subject property. In 2013, the City adopted a Housing Assistance Policy. If/when a request for project assistance from the Buyer comes forward, staff would recommend it be reviewed in context of the Housing Assistance Policy, along with other applicable City policies and standards, at the time of the request. Lastly, staff would like to note, this clause does not require, bind or obligate the City to provide any project assistance to the Buyer. Funding Source: NA Recommendation: