Agenda - Council - 11/27/2018 - Laserfiche WebLink

Home

Our Mission: To wok together to respcsibty grow Our community, and to provide quality, cest,effective, and efficient government services. CC Regular Session 7. 1. Meeting Date: 11/27/2018 By: Sean Sullivan, Community Development Information Title: Adopt Resolution #18-250 Amending Approved Right of Re -Entry Agreement; Case of Centra Homes Purpose/Background: The City of Ramsey has negotiated an agreement with Centra Homes (the "Developer") and is prepared to close. This agreement involved the platting and development of 40 single family residential lots located at the southwest corner of Bunker Lake Boulevard and Ramsey Boulevard. As with any city land transaction project, a Right -of Re -Entry agreement (the "Agreement") was executed with the Developer on May 8, 2018. The Agreement called for the the construction of 15 housing units and corresponding certificates of occupany to be issued according to the Construction Deadline Schedule by October 1, 2021. Per the standard city right of re-entry agreement the City has the ability to take back the undeveloped land if the terms and conditions of the Agreement are not met, which in this case is not obtaining the required amount of certificates of occupancy per the Construction Deadline Schedule. The City also has the right to specially assess $5,000 on lots for each certificate of occupancy that is not obtained according to the Construction Deadline Schedule. Prior to the scheduled closing the Developer contacted the City and indicated that their lender would not finance the project due to the language contained in the Agreement. After the Developer reviewed Paragraph 4 of the Right of Re -Entry Agreement with the lender, it was determined that this paragraph would not allow the Developer to borrow any money for the development in this neighborhood. the Developer would not be able to 'self -finance' the entirety of the development and construction of 40 homes without the help of a lending institution. The Developer utilizes a Line of Credit financing option with its lenders that allows borrowing a percent of value to financing the development and construction of neighborhod developments. Since the Right of Re -Entry will be recorded prior to any mortgage, the City would be able to exercise the Right of Re -Entry and clear any subordinate mortgages/liens on the property.The Developer has indicated that their lender is not willing to take that risk. Notification: N/A Observations/Alternatives: