Agenda - Council - 12/10/2019 - Laserfiche WebLink

Home

CC Regular Session 7. 3. Meeting Date: 12/10/2019 By: Sean Sullivan, Community Development Information Title: Adopt Resolution #19-299 Approving Purchase Agreement Third Amendment for AEON Ramsey 2, LLC (portions may be closed to the public) Purpose/Background: Generally speaking, the purpose of this case is to consider a short term extension to allow reasonable time for full negotiation. A clause in the Agreement prevents AEON from moving to closing despite their desire to close (see details below). A short term extension will simply allow Staff, EDA and Council time for a typical negotiation cycle (EDA is not able to review due to timing of request). Due to timing of meetings, Staff is feeling rushed to a recommendation for the December 10, 2019 Council meeting, and doesn't feel Staff can provide a well-rounded recommendation either in support or not in support of ongoing discussions without further negotiations and review by the EDA. The City and Developer have invested multiple years of work towards this project, and additional time for discussion would honor past commitment. This short term extension will allow the process to go in front of the EDA in early 2020 before Council needs to take final action. The extension requires additional negotiations. The City Council will retain its discretion to either extend to a point to allow for construction or let the Purchase Agreement expire. Staff is aware of the Council's desire to evaluate future planned multifamily projects in the context of our future land use plan (Comprehensive Plan). This project was considered in the 'pipeline' and was under a real estate contract. Staff wants to make sure that the Council has all pertinent facts before making a decision on the Purchase Agreement Extension. Purpose: Review request by AEON Ramsey 2, LLC dated December 3, 2019 to extend January 13, 2020 to April30, 2020. AEON Ramsey 2, LLC did not receive funding from Minnesota Housing for the 2019 application cycle. The inability to get this funding has resulted in the request for the Purchase Agreement Third Amendment by the Buyer to allow for more time to renegotiate or to perform. AEON will be in default of the Purchase Agreement Second Amendment if they do not close by January 13, 2020. Background: AEON (Greenway Terrace) constructed a 54 unit affordable housing project that has now opened in the COR. The Developer has entered into a purchase agreement to buy and develop the land adjacent to Phase 1 and complete Phase 2 of the project. A representative of Buyer has indicated that Phase 1 is fully leased and there is a waiting list of 300 for Phase 2. On June 14, 2017, the City of Ramsey entered into a Purchase Agreement to sell Outlot A, Greenway Terrace, to AEON Ramsey 2 LLC for $123,368. The City received $10,000 in earnest money which is now non-refundable. The term of the agreement was until October 13, 2018. An option to extend closing for up to two 90 day periods was included in paragraph 17.1 and required deposit of an an additional $10,000 in non refundable earnest money. On May 22, 2018, AEON Ramsey 2 LLC and the City of Ramsey executed the Purchase Agreement First Amendment. The City of Ramsey received an additional $10,000 in non-refundable earnest money. The terms of this agreement stated that Closing on the property must occur on or before October 13, 2019. There is no reference to extending the Closing date in the First Amendment.