Agenda - Economic Development Authority - 06/13/2019

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Regional Economic Development Partnership. CBRE is a proven industry leader, but there are some cost advantages of utilizing the MNCAR service that Anoka County can provide that reach the same audience in similar ways. Notification: Notification is not required. Observations/Alternatives: Alternatives include, but are not limited to the following: 1. Continue Contract with CBRE with existing language. 2. Amend Contract with CBRE on the number of properties listed for specific properties, commission, look -back period, or other standards. 3. Seek proposals from other real estate brokers. 4. List and market properties utilizing City Staff. Draft CBRE Contract Highlights: 1. The following parcels have been removed from the listing contract dated June 7, 2018: • Parcel 8 - Amoco Site - 25-32-25-43-0043 • Parcel 11- Water Tower site at 167th - 11-32-25-43-0004 • Parcel 37a - 14165 Ramsev Blvd NE - 27-32-25-33-0006 • Parcel 40 - Bookstore Site - 34-32-25-13-0005 • Parcel 51 - Cottages at the COR 28-32-25-14-0094 (SOLD) • Parcel 52 - (Remnant end cap / keyhole) 28-32-25-13-0034, 28-32-25-24-0005 • Parcel 45 - Remnant south of 146th Ave NW - 29-32-25-14-0013 • Parcel 6 - Old Muni Site - 28-32-25-41-0081 (SOLD) 2. The Commission Schedule is outlined in Paragraph 10 (a)(b). Leads generated by CBRE will receive a commission during the term of the contract PLUS an additional 180 days after the contract expires for any prospect CBRE had negotiated with during the term of the contract (common in real estate contracts). Additional specifics can be found in the attached contract. 3. Cancelation provisions found in Paragraph 19. Either party can cancel the Listing Agreement after 6 months with 30 day written notice. 4. CBRE is entitled to a Minimum Fee. See Exhibit A, Section 3 and 4 3. Broker (CBRE) shall receive a minimum fee generally as follows: 1. $1.50 per gross square foot for the sale of any industrial or office land 2. $5.000.00 for the sale of any residential parcel of land 3. $5.000.00 for the sale of any residential parcel of land greater than $45.000 4. $3.500.00 for the sale of any residential parcel of land less than or equal to $45.000 5. NEW: City Generated Sales Lead: If a potential prospect/buyer is generated by the City of Ramsey with no prior contact or discussions with/from CBRE than the commission will be reduced to 3% of the gross sales price to calculate commissions. If potential buyer generated by City of Ramsey has a cooperative broker, there will not be a fee reduction. 6. Standard Commission found in Exhibit A. As to sales of real property, CBRE's commission shall be five percent (5%) of the gross sales price. If a cooperating broker or salesperson procures the sale, the commission will be seven percent (7%) of the gross sales price. If approved, revisions would take effect August 1, 2019. Funding Source: There is no immediate or initial up front costs. CBRE is only paid at time of sale, and a commission is deducted from the gross sales price rather than an hourly rate. If the City desired to consider a different model than a traditional commercial broker, such as all in-house, Staff would recommend a broader discussion about the EDA's budget, and would recommend that additional funding be placed into professional services and/or staffing for the transition.