Agenda - Economic Development Authority - 08/13/2020

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Economic Development Authority (EDA) Meeting Date: 08/13/2020 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development Title: Consider Third Amendment to Purchase Agreement with Ramsey Hotel Group LLC 4. 1. Purpose/Background: Purpose: Ramsey Hotel Group LLC has requested the City extend the Inspection Period from August 30, 2020 to August 3, 2021 due to the Covid-19 Pandemic and its impact on the hospitality industry. Background: The Covid-19 Pandemic has greatly impacted hospitality, retail and service businesses. The uncertainty as to when these sectors will return to "normal" market conditions is causing many projects to pause in their plans for growth. Staff believes the request to extend the Inspection Period to allow for more certainty of market/operations for the business is warranted. The Buyer is required to give a Notice to Proceed by the Inspection Period date. Providing a Notice to Proceed starts the clock for scheduling the Closing (30 days, unless Buyer purchases an extension) per the terms of the Purchase Agreement. On July 28, 2020, the City Council adopted the Second Amendment to Purchase Agreement extending the Inspection Period date from August 3, 2020 to August 30, 2020 to give Staff and the Developer time to find a mutually agreeable solution to extend the Inspection Period date and/or to delay the required Closing date. Notification: N/A Observations/Alternatives: Observations: Ramsey Hotel Partners has received City Council Site Plan Approval for the proposed 60 Unit hotel with Pool and restaurant. They have also received Final Plat Approval from the City for the required subdivision. The City Council has approved a TIF agreement that will allow for 100% reimbursement for the land acquisition cost of the development property. Staff understands the impact that Covid has had on this industry and generally supports the request by the developer to extend the Inspection Period and Closing Date. Staff has drafted the attached Third Amendment to Purchase Agreement that includes the developer's request to extend the Inspection Period Date until August 3, 2021. No other terms or conditions of the PA are being changed in their proposal. This serves as a good starting point to discussions moving forward. In addition to extending the Inspection period 365 days, there are other items/terms that should be considered. These items include: 1. Provision of non-refundable cash by the developer to the City to extend the the Inspection Period 1 year. 2. Reduction of City requirement to refund $3.500 in accumulated costs related to the platting of the property. (Section 30 of original PA) 3. Something Else. Staff is currently working with the developer to find a mutually agreeable solution and will be prepared to update the EDA of the status of the negotiations at the meeting. Staff does believe that these are extraordinary times and that consideration to solutions that are not typical operating procedures should be explored.