Agenda - Economic Development Authority - 06/08/2017

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specialize in, and to do so successfully. Staff believes the buildings that Sharp has established in Ramsey have played a major role in Ramsey's overall success in economic development. Reason being, Sharp has created a model very close to a private sector business incubator(s). Sharp attracts new and small business to his affordable, right -sized multi -tenant buildings... then, when they are ready to expand or build a new building, they work with Sharp (and typically stay in Ramsey). Sharp has constructed 10+ owner -occupied buildings in Ramsey for said tenants. Staff believes Sharp is one of Ramsey's greatest development relationships/ partners. This project generally fits the mold outlined above. Proposed Project Sharp is proposing using about half of the property for a 50,000 square foot multi -tenant, small -bay, industrial building. Sharp plans to construct the first building immediately. Please see attached concept map and renderings. The other half of the property will be used by Sharp, in the future, to construct owner occupied projects (2-3, 15,000-30,000 facilities). Sharp is currently working with multiple prospects interested in the owner -occupied land. Staff believes Sharp's approach is to Ramsey's benefit --as the type of user interested in owning a new 15,000-30,000 sf building usually doesn't have the resources or expertise to mange such a project. Sharp works well with these prospects, as he is affordable, does quality work, makes the process turn -key, and allows the buyers to own their new building (many business park developers will only lease back). Notification: Observations/Alternatives: OBSERVATIONS Listed below are terms/ conditions/ observations related to the attached purchase agreement that staff considers important to highlight for potential discussion. (1) Policy Compliance Staff has no policy compliance concerns. This project is not requesting a formal business subsidy, the City's Revolving Loan Fund, or State DEED Programs. The attached PA is simply an edited version of the City's adopted "template PA." Therefore, generally appears to be in compliance with City's Land Sale Policies. (2) Offer Price $1.50 per square foot or $606,622. The buyer is making an offer that is below the City's standard asking prices for industrial land ($1.75-$2.50 psf). However, it is within the City's acceptable deal range. If desired, this item should be discussed in closed session. Staff did add a contingency RE this item in the agreement (See Section 29). We are asking for a $150,000 letter of credit. If the speculative building is not constructed by the deadline, we would receive an additional $150,000 in land proceeds, and push us well within the City's asking price. Lastly, the buyer has completed geotechnical soil evaluations on the property. It appears 1-3 feet of topsoil will need to be removed from the property, and replaced with buildable soils. Additionally, the site will need to be slightly raised allow for proper drainage. Finally, this site will require some minor redevelopment work/ minor clean up, as it is not a green -field site. With these three items in mind, the buyer has indicated the cost to remediate will be in the hundreds of thousands of dollars. Therefore, buyer has indicated he cannot pay more than $1.50 per square foot --as the property is not shovel ready. If there was not soil remediation issues, the buyer indicated they could pay closer to $2.00 per square foot. (3) Earnest Money $10,000, to become hard after inspection period.