Agenda - Economic Development Authority - 01/08/2015

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With the recent dissolution of the Ramsey HRA, this agreement has been updated to include the "City of Ramsey" as the seller (rather than the Ramsey HRA). 3. 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 close). 4. 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. Staff would like to note, this clause does not require, bind or obligate the City to provide any project assistance to the Buyer. Notification: NA Observations/Alternatives: OBSERVATIONS • The Original PA and New PA contain very similar terms and conditions. PSD's proposed use for the for the subject property also remains the same (two phases of apartments and a hotel). • Generally, the proposed development concept fits within the City's existing zoning regulations (will require official site plan review and approval). • The asking price for the subject property is $4.00 per square foot. The PSD offer price is $3.12 per square foot (note: PSD has agreed to constructing the required public roadway). The Council has previously reviewed this offer in closed session and accepted said price. • The first phase of this development is a 120 -unit market -rate apartment complex. This apartment complex is anticipated to generate $161,500 in total local property taxes (about $53,750 City). This apartment complex is anticipated to begin construction in the summer of 2015. PSD has indicated executing a PA in January 2015 is important to their project timeline. PSD has estimated this phase will cost about $20M to design and construct. • The second phase of this development is another apartment complex. The size of this apartment complex will depend on several factors (market demand, parking, etc.). • The third phase of this development is a two -phased hotel. The first phase would be 70 rooms. The second phase would include an unknown number of rooms. PSD is currently negotiating with prospect hotel operators. • Staff has received feedback from CBRE (prospect businesses) and existing retailers that additional rooftops are needed to attract new retailers and restaurants to The COR. ALTERNATIVES 1. Approve proposed PA(staff recommendation) The New PA is very similar to a previously executed PA. The proposed deal provides several benefits to the City: (1) TIF -14 tax base which will help pay City obligations within The COR, (2) land -sale proceeds which will help payoff outstanding debt for original purchase of The COR, (3) additional rooftops located within The COR, (4)