Agenda - Council - 01/28/2020 - Laserfiche WebLink

Home

CC Regular Session Meeting Date: 01/28/2020 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development 7. 2. Information Title: Adopt Resolution #20-022 Approving Purchase Agreement and Preliminary TIF Financing Deal Structure for Part of Outlot A, COR Stone Brook Academy; Case of Cobblestone Hotel Development, LLC (Portions may be closed to the public) Purpose/Background: The purpose of this case is to consider approval of Purchase Agreement and Preliminary Tax Increment Financing (TIF) Agreement Structure. This does not approve the proposed project. Traditionally, this step in the process of City Land Sale Transactions only includes consideration for the Purchase Agreement while the TIF Agreement would come at a later date. However, since the TIF Agreement is an integral part of the Land Sale Price, Staff and Ehlers (financial advisor) have done preliminary analysis to determine if assistance in the form of land write -down is warranted. Staff will bring the final version of the TIF Agreement back to the EDA and City Council at a future meeting after a more detailed review for formal recommendation to the City Council on the TIF Agreement specifically. Staff is looking for the City Council to to approve the attached purchase agreement which includes contingencies relating to approval of Tax Increment Financing (TIF). The City of Ramsey and Cobblestone Hotel Development, LLC have been negotiating the terms of a purchase agreement (PA) over the past 6 months. Cobblestone has agreed to valuation of $5.00 per square foot for the land to be acquired to construct a 60 Unit, four story hotel, including a restaurant. Cobblestone has requested up front TIF Financing by the City to support a land cost write -down. The proposal would allow the city to recover the land sale price over time through the collection of Tax Increment generated by the new project. Depending on the final site layout it is anticipated that the project will need 1.5 to 2.0 acres . Based on this information, the value of the land ranges between $326,700 to $435,600. For the purposes of the current PA an an acreage of 1.5 acres is being used. If the City were to utilize up -front TIF Financing, it would constitute a business subsidy to the Developer and a Public Hearing and TIF Agreement would be required supporting the land cost write down for the developer. The proposed value assigned to the price is within the City's approved deal range for this parcel. The proposed purchase agreement includes a development concept previously reviewed by the EDA and Planning Commission. The lot configuration, as currently presented allows leaves approximately 1.5 acres for a future project to the west that is currently under contract by GiGi's Salon. Staff anticipated the Hotel site to increase slightly and the Gigi's Salon site to decrease slightly. The purchase agreements for each party will be adjusted to reflect the final square footage needed by each project. There will be no small undevelopable remnant parcels being created as part of this transaction. The time periods and extensions outlined in the term sheet and PA are consistent with the standard template. Notification: Notification is not required. Observations/Alternatives: