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

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Deputy City Administrator Gladhill noted that as of today, the Purchase Agreement is in default and therefore staff needs to know whether to execute that notice or hold back on that. He stated that additional discussion could occur at a future date. Mr. Arthur stated that he would like to move forward with the original plan to complete both phases of the development and would be willing to submit a check the following day to do so. He understands that the City wants to ensure that this project will be completed, and he noted that he would be willing to do whatever necessary to help provide that confidence. He stated that the original contract did not divide the project quite like this, explaining that there were changes made following phase one, which caused this language of default. He stated that AEON has been doing what they said they would do from the beginning, which is to make both phases occur within three to five years. Councilmember Kuzma stated that the developer has been working on this for multiple years and while there were a few bumps, phase one looks nice and is running well. He stated that the current Purchase Agreement has been extended twice already and this is a willing buyer. Motion by Councilmember Kuzma, seconded by Councilmember Menth, to direct staff to work with AEON to extend the Purchase Agreement. Further discussion: Councilmember Musgrove asked the purpose of holding a retainer and the purpose of holding those funds. Deputy City Administrator Gladhill explained that with any real estate transaction you want to ensure that the buyer has an interest in moving forward. He stated that the funds become nonrefundable under certain conditions, such as extensions. He explained that as the process goes further along there are additional expenses incurred for continued staff time and legal expenses. He confirmed that those funds are sometimes in excess of the exact City costs, as the City wants to ensure that the buyer has a sufficient interest in the City holding the property for an extended amount of time. Councilmember Musgrove stated that she supports selling City owned land, but this project already received two extensions. She asked for information on the funds the developer states that he could have at City Hall the following day. Mr. Arthur stated that AEON is willing to bring the remainder of funds to complete the purchase the following day, if desired. He stated that one challenge of AEON doing that would be that AEON would own the property and the City would lose the ability to control the pace of development on that site. Deputy City Administrator Gladhill confirmed that the previous Council wanted to hold more control over the development, noting that the standard City process includes a right of re-entry process that would allow the City to take that land back if development process does not occur within a set amount of time. He stated that because of the type of funding used by AEON, a right of re-entry cannot be included and that is why this project moved forward in this manner Councilmember Riley stated that the Purchase Agreement is expired and is in default. He asked if the motion would direct staff to create a new Purchase Agreement. Councilmember Kuzma stated that he would default to staff to determine the best method to move forward. Deputy City Administrator Gladhill stated that if the intent is to accept the check for the remainder of payment on the account, the motion would be to not issue the Notice of Default and proceed to closing on the current Purchase Agreement. He noted that another option would be to negotiate a new Purchase Agreement. Councilmember Kuzma restated his motion as follows: City Council / January 14, 2020 Page 7 of 16