Agenda - Council - 06/09/2020 - Laserfiche WebLink

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CC Regular Session Meeting Date: 06/09/2020 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development Information Title: Receive Request to Reconsider Greenway Terrace 2nd Addition; Case of Aeon 7. 6. Purpose/Background: Purpose: AEON is requesting that the City of Ramsey enter into negotiations and to execute a letter of intent / purchase agreement with AEON to sell Outlot A, Greenway Terrace for the development of Greenway Terrace Phase 2 . A letter of intent / purchase agreement would demonstrate the required site control needed for the July 2020 funding application to Minnesota Housing Finance Agency needed by AEON to proceed. Background: Greenway Terrace Phase 1 - AEON opened Greenway Terrace Phase 1 in 2018. Greenway Terrace Phase 1 is 54 units and home to approximately 250 residents. Property taxes payable in 2020 are $59,024.82 based on a tax -assessed value of $6,533,400. Estimated annual property taxes for 2021 are $76,113.93 based upon a tax -assessed value of $8,810,400. This project is was first phase of a two building project in the COR. While under construction, Phase 1 received over 300 applications for 54 units — demonstrating a strong need for affordable housing in Ramsey and the region as a whole. Greenway Terrace Phase 2 / Expiration of Purchase Agreement - The City Council adopted Resolution #20-013 issuing a Notice of Default which effectively terminated the purchase agreement between the City and AEON Ramsey 2 LLC. AEON Ramsey 2, LLC was unable to perform to the terms of the Purchase Agreement and the City exercised its remedy per the terms of the Purchase Agreement. The sales price for the land (1.36 acres) was $123,368 ($2.08/SF). The City received $30,000 of non-refundable earnest money and has retained it. Greenway Terrace Phase 2 / Offer to to Enter into Negotiations - Aeon has provided a project narrative outlining the performance of Greenway Terrace Phase 1 and the desire to move forward with a New Letter of Intent / Purchase Agreement and to complete Phase 2 of their planned project. Greenway Terrace Phase 2 would be a 55-unit building with units available to households at or below 50% ($51,700 for a family of 4) and 60% AMI ($62,040 for a family of 4). Some of the units have been designated for high priority homeless families. These units will be affordable at 30% AMI and will be supported by an onsite case manager. Attached to this case is the design package showing the site plan and elevations. Letter of intent / purchase agreement Aeon is requesting that the City of Ramsey issue a letter of intent to enter into a purchase agreement with Aeon for the Greenway Terrace Phase 2 parcel. A letter of intent would demonstrate the required site control needed for the July 2020 funding application to Minnesota Housing Finance Agency. Note, a letter of intent and purchase agreement are two separate actions. The letter of intent is a preliminary and non -binding action indicating a desire of the parties to (in this case) enter into a purchase agreement. Even though the letter of intent is non -binding, it is enough of an action to demonstrate control of the site for the purposes of Aeon to make the funding application. Subsequent approval of a purchase agreement will then legally bind the parties to the provisions outlined in the document.