Agenda - Economic Development Authority - 05/13/2021

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5/7/2021 Agenda Economic Development Authority (EDA) Meeting Date: 05/13/2021 By: Sean Sullivan, Community Development 4.1. Title: Consider First Amendment to Purchase Agreement with Java Properties, LLC (Portions of meeting may be in closed session) Purpose/Background: Purpose: Consider First Amendment to Purchase Agreement to reduce purchase price due to increased development cost. Background: The City entered into a purchase agreement with Java Properties, LLC with an Effective Date of September 23, 2020. The City has received $10,000 in nonrefundable Earnest Money and the land transaction is scheduled to close on or before June 22, 2021. The project received Final Plat and Site Plan Approval on March 23, 2021. Staff has been working with engineering to determine the best way to have city utilities (sewer and water) service the property and the remaining parcel to the West. Rather than cut into Sunwood Drive NW and to cause an extended road closure, it was determined that a better solution is to bring the utilities in along the future extension of Peridot Street to the West to to run south along Sunwood Drive. In addition, Staff has worked with the developer to find a temporary access solution to the west to reduce the traffic at the east access point it shares with Casey's. This would involve a temporary bituminous frontage road/access along Sunwood Drive to enter/exit at the future Peridot Street. These changes to the original site plan amount to an added cost of $55,000 to the project. The Developer has asked the City to help with these added costs. Notification: N/A Observations/Alternatives: Rather than cost share with the project Staff is asking the EDA to consider reducing the land price to compensate for a portion of the added project costs. The City has a history of sharing in these type of costs in the COR with a 60%/40% split. The estimated additional project costs are $55,000. If those costs were to be split 60/40 the City would be responsible for $33,300 and the Developer $22,200. Staff is asking the EDA to consider a reduction of $33,300 from the Purchase Price rather than a cash contribution. The reduction in price would equate to a $6.98 / square foot price rather then the $8.00 / square foot originally negotiated. Staff has provided the original term sheet and the proposed changes (in Bold) for consideration. Alternatives: 1. Recommend that the City Council approve the First Amendment to Purchase Agreement (as presented) 2. Recommend that the City Council approve the First Amendment to Purchase Agreement (with changes) 3. Something else. Funding Source: N/A Recommendation: Staff recommends that EDA recommend the City Council approve the First Amendment to Purchase Agreement (as presented). https://agendas.cityoframsey.com:8085/print_all.cfm?seq=21894&reloaded=true&id=0 3/12