Agenda - Economic Development Authority - 02/05/2015

Home

Notification: NA Observations /Alternatives: OBSERVATIONS • Zoning /Use: Generally, the proposed development concept fits within the City's existing zoning regulations (will require official site plan review and approval). • Sale Price: The asking price for the subject property is $2.50 per square foot ($105,000). The offer price is $2.29 per square foot ($95,000). The offer price is on the "high -end" of the City's adopted "deal- range" for the subject property. Staff will recommend this offer price be accepted. • Property Taxes: The proposed development is approximately 12,000 square feet. This building property will generate about $31,000 in total property taxes (about 25% would be received by the City). • Earnest Money: This PA does include earnest money ($3,000, 3.1 %). Earnest money will become hard if the initial closing date is extended by the buyer. • Broker Commission: Commission will be paid to both the buyer's real estate agent and the seller's real estate agent via the seller's (City) land sale proceeds (3.5% or $3,325 each). • Net Proceeds: sale price less broker commissions results in net proceeds of $88,350. • Closing Date: Closing is set for June 24, 2015. Attached to this case is a mock project timeline. • Land Sale Policy: The attached PA generally meets the intent of the City's draft "Land Sale Policy" and has been reviewed by the City Attorney, the City's real estate broker, and staff. Several changes (and negotiations) have taken place between staff and the buyer. The buyer has been willing to make several changes. • Buyer: The buyer (Derek West of 24 Restore) has a history of providing business services to the City of Ramsey. City staff has been impressed with the professionalism and reliability of Mr. West's company. ALTERNATIVES 1. Approve (staff recommendation) The proposed deal provides several benefits to the City: (1) tax base (2) land -sale proceeds (3) retain and create jobs (4) quality project (5) positive momentum for development in Ramsey (6) the Council's general goal of selling tax- exempt surplus City owned land will be realized. 2. Deny Unless a specific hardship or concern regarding this PA can be identified by the Council, staff would not recommend moving forward with this alterative. If the proposed agreement is terminated, the Staff would restart marketing the subject property with CBRE. 3. Amend The Council may wish to tweak or adjust provisions included in the proposed PA. Staff would be happy to make adjustments as requested by the Council. Funding Source: NA Recommendation: Please see observations section. Action: Recommend to the City Council: Approve the attached purchase agreement with WESTCO Properties LLC. for .95 acres of City owned land located at 6590 141st Ave NW; contingent upon final review and amendments from the City Attorney.