Agenda - Council - 08/28/2018 - Laserfiche WebLink

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GS Land, LLC 5115 Wooddale Glen Edina, MN 55424 612-868-0662 June 4, 2018 Mr. Tim Gladhill Community Development Director City of Ramsey 7550 Sunwood Drive NW Ramsey, MN 55303 Re: Harvest Estates — Phase 2 Dear Mr. Gladhill, As you know, GS Land, LLC currently has a Real Estate Purchase Agreement (PA) with the City of Ramsey for approximately 6.42 acres. The property is located directly adjacent to the recently developed Harvest Estates — Phase 1 and, is currently proposed to be developed as Harvest Estates — Phase 2. The current PA price for the 6.42 acres is $279,270.00. While it may have always been known that the site would require some imported fill to develop the property in conformance with the preliminary plat, it was only this past spring that the engineering analysis was actually performed and, the significant amount of imported fill was accounted for. The current total estimated cost of $1,134,000.00 to develop the site is simply not feasible, in our opinion. The preliminary plat for Phase 2 has 12 residential homesites and, based on our engineer's analysis, this is the maximum number of homesites that can be plated on this parcel. That puts the per lot cost of development, excluding any margin of profit for the developer, at an estimated $94,500.00. Based on an average lot sales price of $78,800.00 in Harvest Estates — Phase 1, and our belief that the market will not allow a significant increase in per lot sales prices, the current estimated development cost would not allow us to move forward with Harvest Estates — Phase 2. However, if we could achieve a development cost something below $70,000.00 per homesite, we would likely move forward with Harvest Estates — Phase 2 as soon as practical. Unfortunately, there is a differential of approximately $25,000.00 per homesite, or a total of $300,000.00 that needs to be eliminated from the current estimated cost of $1,134,000.00. It is our opinion that the only way to bring the cost of the development down n to a point where we may be able to move forward, is to reduce the raw land price. Therefore, GS Land is requesting an amendment to the PA reducing the current purchase price from $279,270.00 to a proposed price of $5000.00. While this reduction may seem extreme, we believe there are few, if any, alternatives that would allow for the residential development of this site now, or in the foreseeable future. 1