Agenda - Council - 11/26/2019 - Laserfiche WebLink

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owned property). The total investment in Phase one of this project is anticipated to be near $6 Million Dollars. Anderson Dahlen plans to (a) keep their existing facility and (b) construct/operate from the new facility in Ramsey on the Subject Property. Anderson-Dahlen currently has over 300 full time employees and plans to add 60 over the next 3 years as a result of this proposed business expansion. BACKGROUND (Purchase Agreement) Attached to this case is a Draft Purchase Agreement defining the new terms of the extended time period to close and complete the project. The purchase price remains at $675,000 and the size of the proposed project remains unchanged. Notification: Notification is not required. Observations/Alternatives: OBSERVATIONS • Zoning/Use: The proposed development concept fits within the City's existing zoning regulations and the Site plan was approved on June 25, 2019 • Sale Price: The asking price for the subject property is $2.47 per square foot ($1,000,000). The offer price is $1.66 per square foot ($675,000). The offer price is "below the mid -range" (but within the total deal range) of the City's adopted "deal -range" for the subject property. • Property Taxes: The proposed development is based on a 75,000 square foot building with the possibility for an additional 40,000 square foot expansion. Based on an estimated taxable market value of $4,000,000 for Phase 1, this project will generate about $133,000 in total annual property taxes, with the City receiving approximately 25% ($33,250) annually when it hits the tax rolls. • Earnest Money: This PA does include earnest money ($67,500.00, 10%). Earnest money will become hard after the Notice to Proceed is given by the Buyer (No later than January 31, 2019) . The Developer has provided a down payment of $67,500 to the title escrow company according to the terms of the purchase agreement. • Broker Commission: There is no broker commission for this transaction • Net Proceeds: $675,000. • Closing Date: no later then 45 days after the Notice to Proceed has been provided to the City. (No later than March 16, 2020). • Land Sale Policy: The PA meets the intent of the City's draft "Land Sale Policy" and has been reviewed by the City Attorney, and staff. Several changes (and negotiations) have taken place between staff and the buyer. • Buyer: The buyer (Knoll Properties / Anderson Dahlen) has a history of success and delivering on projects in Ramsey as shown by its expansion to its original building onsite and its commitment to creating "living wage" jobs in the community. This project has taken longer than originally anticipated by Anderson Dahlen. • Right of Re -Entry Agreement: The current Right of Re -Entry Agreement is attached with a Certificate of Occupancy date of December 31, 2020. A clause was added to allow for partial reimbursement of the $675,000 purchase price if the project does not move forward. • Project Readiness: Survey, site plan and plat are approved. Building plans drafting and environmental is complete and paid for by Buyer. This project is ready to go if a manufacturing contract can be secured by Buyer by January 31, 2020. The Developer's Attorney requested some clarifying changes to the Purchase Agreement the EDA reviewed on November 14, 2019. The City Attorney has reviewed and accepted those changes and has determined that they do not have a material change to the agreement. There has been some general interest in the site by another commercial user. The City is also in the process of defining the future public works campus. If the purchase agreement is approved and the Buyer does not give a Notice to Proceed by January 31, 2020, it would make sense to potentially re-evaluate the future use of this parcel. ALTERNATIVES 1. Approve