Agenda - Economic Development Authority - 11/09/2017

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Economic Development Authority (EDA) Meeting Date: 11/09/2017 Submitted For: Patrick Brama, Administrative Services By: Patrick Brama, Administrative Services Title: Preliminary Deal Structure: Case of National Auto Body & Glass User 4. 1. Purpose/Background: PURPOSE Consider preliminary deal structure for the purchase of a 4.14-acre city -owned property located on the former BA Cylinder Site (CBRE Listing #37). The purpose of this case is to provide staff preliminary input/ ask questions. The purpose of this case is not to approve the deal. Staff intends to bring back a formal purchase agreement, with a formal EDA case, in December. BACKGROUND The proposed users is a national auto body and glass service provider (the end user has asked to remain confidential at this point). The buyer, project manager, and developer is Oppidan--a Twin Cities based development company. Therefore, the purchase agreement is technically with Oppidan. Staff has received a LOI for this project. However, several changes are currently being negotiated. Included in this case is a summary of deal terms. Attached to this case is the CBRE Listing for this site (#37). Oppidan will be at this meeting. Notification: NA Observations/Alternatives: Proposed Preliminary Deal Terms (1) 4.14 acres of city owned land. Site is the former BA Cylinder Site. Site is currently zoned E2. (2) Offer Price was originally $400,000. CBRE counter offered at $450,000. Property asking price was $450,000. Both offers are within the City's acceptable deal range. (3) Earnest money is $20,000. (4) Due diligence period is six months. (5) Developer is hoping for 2018 early construction begin/ 2018 completion. Important Items Staff would Flag: (1) Project would require a text amendment to the E2 Employment Zoning District. The current zoning language would not allow this use (existing zoning only allows for partial use of a building for an auto user). Therefore, as part of the inspection period for this project, the developer would undergo a zoning amendment application. Staff would request the Planning Commission review this concept project, to provide some preliminary input, before the EDA approves a purchase agreement (December). Based on very preliminary staff discussion, the proposed zoning amendment request appears to have some merit, and staff would support bringing that discussion forward. (2) Staff completed a shovel ready application process for this property. Through that process, a couple potential contamination issues were identified. Staff has completed a Phase I ESA and a Phase II ESA. Staff is currently working with the State MPCA and Bruan Intertech to wrap up this site/ obtain a closer letter from