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Agenda - Council Work Session - 03/28/2017
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Agenda - Council Work Session - 03/28/2017
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Meetings
Meeting Document Type
Agenda
Meeting Type
Council Work Session
Document Date
03/28/2017
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CC Work Session 2. 1. <br /> Meeting Date: 03/28/2017 <br /> Information <br /> Title: <br /> Review McDonald's Project Alternatives <br /> Purpose/Background: <br /> Attached is a copy of a memorandum from the City's attorney in regard to the McDonald's restaurant development <br /> and the current options under consideration due to the fact McDonald's has not meet its construction obligations <br /> under the development contract. <br /> The property was purchased by McDonald's from the Ramsey HRA for$470,000 on February 26, 2014. As part of <br /> the development agreement,the City installed about$300,000 of improvements (i.e., street, sewer,water, and storm <br /> water)to service the three lots of the COR II commercial subdivision. McDonald's paid for$40,870 of these costs. <br /> McDonald's planned to construct a new restaurant on the property and agreed to do so by a certain date. <br /> As the attorney reviews in the attached document,the Deed contained a right of re-entry in favor of the Ramsey <br /> HRA.With this provision in the contract,the HRA (now the City)may commence an action in Anoka County <br /> District Court seeking an order re-vesting title to the Property to the City if McDonald's does not commence <br /> construction of the improvements on the Property within 720 days after the date of the Deed(deadline was <br /> February 16, 2016), or McDonald's does not substantially complete the construction of the improvements within <br /> 1080 days after the date of the Deed (deadline was February 10, 2017). <br /> McDonald's has not obtained a building permit or taken any steps to commence construction on the Property, so the <br /> various dates relating to the Deed, Restrictive Covenant, and the escrow agreements have all lapsed. McDonald's <br /> has informed the City that it desires to continue to hold the property and develop the site when there is an <br /> appropriate level of demand to support the restaurant. <br /> Current actions for consideration: <br /> I. Deed to the Property. Since McDonald's did not substantially complete the construction of the improvements by <br /> February 10, 2017,the City, as assignee or the HRA, can commence an action in Anoka County District Court <br /> seeking an order re-vesting title to the Property. The City's current options are to: <br /> A. Start the district court action seeking an order re-vesting title to the Property. <br /> B. Do nothing and wait for McDonald's to develop the Property. <br /> C.Negotiate a new settlement with McDonald's. <br /> 2. Restrictive Covenant. Upon the execution of an affidavit by a City representative indicating that no construction <br /> has taken place and that McDonald's is not operating a restaurant at the Property,the Examiner of Titles for Anoka <br /> County has agreed to issue an examiner's directive ordering the removal of the Restrictive Covenant from the <br /> various certificates of title for the property it was originally recorded against. The affidavit and examiner's <br /> directive are in process. <br /> 3. Escrow Agreements. The City requested the release of the Sign Escrow Funds and the Soil Escrow Funds in <br /> February after the last date had passed and the escrow agent has returned all funds to the City(with the consent of <br /> McDonald's).Note,the City has set-aside $120,000 of this escrow money to be used for a future multi-tenant sign <br /> for the three-lot development. <br /> Timeframe: <br /> Funding Source: <br /> NA <br />
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