Agenda - Economic Development Authority - 06/08/2017

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The City has officially listed this property with a broker (listing #52). The City has established an official asking price for this property ($2.08 psf, $90,725 per acre, $450,000). Aeon is not offering to purchase the entire listing (4.96 acres), they are offering to purchase 2.02 acres; which can be prorated to ($183,000). Staff believes this parcel is attractive and marketable (unlike the recently reviewed "triangle piece"). Staff believes the sale and development of this property is not a matter of "if' but rather "when." Aeon (project proposal) Attached to this case is detailed background information on Aeon, the proposed project (including a project budget), example projects Aeon has completed in the past, and background information on what income restricted projects really mean. Also attached is a site concept layout and concept design (both are very preliminary). Notification: NA Observations/Alternatives: PA SUMMARY (1) Policy Compliance The attached PA is a hybrid version of the City's adopted "template PA" and the previously reviewed "Common Bond PA." It appears to be in compliance with City's Land Sale Policies. Staff and the City Attorney are currently making final suggested edits to the PA (which will be ready for Council review) --at this point staff has no major concerns/ edits. The proposed offer is considered market rate, and therefore eliminates any discussion of a business/ housing subsidy. (2) Offer Price $183,000 ($183,000 asking price). (3) Earnest Money $9,000 to become non-refundable after inspection period (5% of offer price). (4) Inspection Period 7 months, 12/24/2016. (5) Agreement Term (Closing Date) No later than 09/29/2017. NOTE: the term of this agreement is long, much like Common Bond, due to the many funding partners contemplated, and subsequent application processes. (6) Architectural Review Staff will be adding a clause that requires city approval of the architectural design and layout of the proposed project. This will add a layer, above and beyond our standard zoning process, to ensure a quality project. (7) Construction Deadline The EDA did ask for a construction deadline provision be included in this PA on 05/05/2016. Staff was asked to work with Aeon to find a reasonable solution. Please see below. The property Aeon is considering purchasing is 3.38 acres in size. They only need 88,000 sf for Phase 1 of their proposed development (about 2.02 acres). Phase 2 of their development will occur at an unknown time in the future. Therefore, Aeon is proposing to place an option for the purchase of Phase 2. Aeon is offering $10K per year, for five years. $20K would be paid for upfront (become nonrefundable when the inspection period in the PA expires). The remaining payments would be made annually. As a result of this request, the original land sale price of $300,000, and $15,000 earnest money, were be pro -rated ($183,000 sale price, $9,000 earnest money). CONSIDERATIONS