Agenda - Economic Development Authority - 03/08/2018

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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." (2) Offer Price $2.25 per square foot or $93,110. (3) Earnest Money $7,500, to become non-refundable after inspection period. (4) Inspection Period July 01, 2018 (close 30 days after). (5) Extension Option If the buyer decides to extend the PA, they will be required to place $10,000 of additional non-refundable dollars in earnest for each 60 day extension (maximum two extensions allowed). (6) Construction Deadline Minimum 9,000 sf building by December 31, 2019. Funding Source: NA Recommendation: STAFF REVIEW If there is desire to make a counter offer on price, staff will suggest the attached PA be discussed in closed session. Staff is not making that request. RE price, staff would note, a negotiation on price has gone back -and -forth between staff and Sharp, and $2.25 was the best price staff was able to achieve. Below are some project benefits worth noting: • This project was pulled from the CBRE listings contract in 2017, no commission payments are anticipated. • This project does not include any incentives, such as TIF. As a result, it will have an immediate positive impact to the general tax levy. • This project is estimated to generate about $25,000 in total annual property taxes. Ramsey receives roughly 1/4 of commercial property taxes. • This project is speculative --meaning, tenants are unknown at this point. Therefore, job count predictions are challenging to make. At full occupancy, staff would predict the creation of 5-50 jobs, depending on the tenants. • This project will collect development fees, estimated at about $20,000-30,000. • This project does help Ramsey accomplish goals outlined in the Council Strategic Action Plan and EDA Workplan. • Staff believes Sharp is a quality developer with a good track record in Ramsey; especially with Ramsey's business community. • Speculative industrial buildings place Ramsey in a strong position to recruit new businesses and retain expanding businesses. Action: