Agenda - Planning Commission - 02/02/2017

Home

Term Sheet - Listed below are terms/ conditions related to the a future proposed purchase agreement that staff considers important to highlight for potential discussion. At this point, due to the unresolved site location discussion, staff did not attached a detailed/ actual purchase agreement. (1) Offer Price $3.30 per square foot is currently being offered by Stone Brook. Asking price is $5.00 per square foot. Original offer was $0. Staff countered at $4.00. Stone Brook countered at $2.50. EDA countered at $3.50. Stone Brook countered at $3.00. EDA countered at $3.30. (2) Earnest Money $10,000 or 5% (whichever is more). (3) Contingency Period 07/01/2017. Closing takes place 10 days after. (4) Extension Option If the buyer decides to extend the PA, they will be required to place $2,500 of additional non-refundable dollars in earnest for each 30 day extension, maximum two extensions. (5) Construction Deadline This agreement does include a construction deadline. 9,900 sf commercial building must be constructed by 08/01/2018. If the buyer defaults, City can either collect a $25,000 payment or reclaim property. (6) Assignment The buyer intends to establish a new entity to own/ manage this project. The principals of that new entity will be Mr. and Ms. Johnson. Therefore, staff expects this agreement to be reassigned at some point. We intend to include language in this agreement that allows. (7) Development Agreement This agreement requires the buyer to complete the entitlement process before closing. This ensures the City knows what will be constructed, and that it will comply with zoning code. Project Benefits - (A) An acre of development fees is estimated at about $60,000 (2016): $3,966 park, $1,090 trail, $6,131 water, $3,391 sewer, $4,577 storm water management, $40,000 COR storm water. Land proceeds, $3.30 psf, $143,748. (B) Tax base is estimated at about $45,000 per year gross. Typically, the city receives about 1/4 of property taxes. However, in this particular scenario, the project is located in an existing TIF District (#14). Therefore, the City would collect roughly just over 50% of the tax base via TIF. This tax base is helpful for the city --as their is need to develop funding sources for other improvements in The COR. (C) Stone Brook believes this project will drive 100+ families, and 15-20 employees, to The COR on a daily basis (2x). Increased traffic counts help drive retail and restaurants. (D) Stone Brook has indicated they intend to construct an impressive looking building that will fit in well with The COR, and they intend to become engaged in the community and The COR--and would like to develop relationships with organizations such as PACT Charter School. (F) Continue momentum of successful development and investment in The COR. Positive momentum is very important in conversations/ recruitment of developers and real estate investors. Page 2 of 2