Agenda - Economic Development Authority - 10/06/2016

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Economic Development Authority(EDA) 4. 1. Meeting Date: 10/06/2016 Submitted For: Patrick Brama,Administrative Services By: Patrick Brama,Administrative Services Title: Platinum Properties Purchase Agreement [Portions may be Closed to the Public] Purpose/Background: PURPOSE Consider the attached purchase agreement(purchase offer of$810,000) from Platinum Properties Group, INC. for a 9.3-acre City owned property located just south of Vision Ease Lens for a 123,840 square foot industrial project. BACKGROUND Site Information This site is zoned E-2 Employment District; which generally allows for"business park"type users. This site is located in one of the City of Ramsey's established business parks,with access to 143rd Ave and Jaspar Street. The City of Ramsey purchased the "Bury&Carlson" site in 2008 for$1.75M,or$1.90 psf(1.84 psf for land only). The City purchased the roughly 20 acre Bury&Carlson site for the purpose of locating a new City Public Works Campus. In late 2015,the City completed a Space Needs Analysis for a new Public Works Campus. As a result of that exercise, it was identified, a 9.3 acre portion of land was unneeded for the Public Works Campus,on the north side of the former Bury&Carlson site.Per informal Council direction, staff was asked to market this parcel for economic development purposes. The City purchased this site with the following funding sources: 1. TIF 2 $134K,Water Fund$292K 2. Sewer Fund$292K 3. Stormwater Fund$292K 4.Water Utility Fund) $719K. The InterFund loan has a current balance of$513K, and is being paid back by the General Fund/General Levy. If this transaction moves forward, staff will recommend the InterFund loan be paid back first,as much as possible,with the benefit of removing a debt service burden from the General Levy. Property Listing The City has not officially listed this property with a broker. However, staff was informally provided direction to begin marketing this property for sale in late 2015. Because this property is not officially listed, the City has not established an official asking price; or subsequent formal deal range. Traditionally,City owned parcels with similar zoning, and the City's future business park(privately owned),carry asking prices ranging from$1.75 per square foot on the low end up to$2.50 per square foot on the high end. For this this transaction in particular(9.3 acres), the math works out to $708,939 to$1,012,770. The prospect buyer,Platinum Properties Group LLC,was brought to the City by CBRE (Brian Pankratz). CBRE recently worked with Platinum Properties Group LLC on a project in our neighboring city(Andover). As reflected in the attached purchase agreement, staff will be recommending CBRE be paid their standard commission on this land transaction(5%),due to the fact they specifically recruited this buyer. Platinum Properties Group INC For background information on Platinum Properties Group INC,please see the attached MEMO and check out their website: http://platinumproperties.com/. In summary,Platinum is a Minnesota based developer that specializes in commercial real estate (office,retail, and industrial).