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CASE <br /> <br /> ACQUISITION OF LOT 1, BLOCK 1, <br />A.E.C. ENERGY PARK SECOND ADDITION <br /> <br />Scan M. Sullivan, Economic Development / TIF Specialist <br /> James E. Norman, City Administrator <br /> <br />Background: <br /> <br />The City currently is a party in a Development Agreement with Direct Enclosures and <br />Connexus Energy that was executed August 19, 1996. The development agreement is in <br />effect until July 31, 2006. The terms of this agreement state that the above-described <br />property needs to generate at least $167,968 in Tax Increment per year. <br /> <br />Recently, BMC, Inc., the parent company for Ramsey based Vision-Ease Lens, Inc has <br />declared bankruptcy. The Vision-Ease Lens operation was put up for auction and the sale <br />is pending to Insight Equity A.P. X, LP. The new ownership has stated that the operation <br />will continue uninterrupted in Ramsey. <br /> <br />The development agreement and the terms of the agreement must be transferred to the <br />new entity to guarantee that the City receives the increment necessary to fulfill the <br />financial obligations of the development agreement. An Assumption Agreement <br />executed by Connexus, Vision-Ease Lens, Inc., the City of Ramsey and Insight Equity <br />would effectively transfer the development agreement to Insight Equity. <br /> <br />The City Attorney and Staff obtained a certificate of good standing and adequate <br />information from the prospective buyer to insure that the business is solvent and is stable <br />from a business standpoint. This is done to assure the City Council that the business is <br />solid and that there shouldn't be any foreseeable problems with performance under the <br />development agreement. The closing for the proposed sale of the property is unclear but <br />staff is seeking approval of the sale of the property and building and to enter into an <br />assumption agreement with any qualifying business. <br /> <br />Council Action: <br /> <br />Direct staff to enter into an assumption agreement to transfer Development Agreement <br />from Vision-Ease Lens, Inc. to Insight Equity A.P. X, LP, a Texas Limited Partnership. <br /> <br />Reviewed by: <br />City Attorney <br /> <br />CC: 09/28/04 <br /> <br /> <br />