Agenda - Council Work Session - 02/08/2016

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Orr Uission: To work together to resposib y grow our community, and to provide quality, cost-effective, and efficient government ierwlcea. CC Work Session Meeting Date: 02/08/2016 Submitted For: Patrick Brama, Administrative Services By: Patrick Brama, Administrative Services 2. 2. Information Title: Discuss Agreements Between City of Ramsey and McDonalds USA LLC Purpose/Background: PURPOSE Provide the City Council with an update related to existing agreements between City of Ramsey and McDonalds USA LLC, and for the City Council to consider the current proposal that has been negotiated. BACKGROUND The City of Ramsey and McDonald's USA LLC executed a purchase agreement for the sale/purchase of City -owned land in late 2012. With three amendments, that agreement closed in 2014. Upon execution of that agreement, two notable documents were recorded: (1) QUIT CLAIM DEED: This document included construction deadline language. Construction commencement must begin by February 10, 2016. Construction completion must occur by February 10, 2017. (2) RESTRICTIVE COVENANT: This document contains a broad set of criteria that restricts competing land uses near the future McDonald's site for a 20 year term. Properties that are affected include only City -owned land currently being marketed for sale by CBRE (see page 23 of original agreement for reference map). This document becomes null and void if McDonald's is not in operation by February of 2017. Notification: NA Observations/Alternatives: It is evident at this point that construction commencement will not occur by February 10, 2016, as required by contract (see attached Attorney's memo for discussion of what this means). However, McDonald's has now agreed that they will not ask for the two year extension for completion of the project, and intends to move forward abiding by the original completion date of February 2017. Also, rather than eliminate the commencement date and grant a two year extension as requested by McDonald's, staff has negotiated the following: • The City would extend the commencement date on the existing contract to September 1, 2016. • The original completion date of February 2017 will remain the same. • McDonald's will submit a developer's escrow account in the amount of $5,000 to be used to cover all staff time and legal expenses incurred as a result of the contract amendment (any unused escrow monies will be refunded to McDonalds. • McDonald's will submit an additional surety of $5,000 cash that would be forfeited, in it's entirety, if the