Agenda - Economic Development Authority - 11/18/2021

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Economic Development Authority (EDA) Meeting Date: 11/18/2021 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development 4. 1. Title: Consider Purchase Agreement for Parcel 50; Case of Java Properties Purpose/Background: Purpose: The purpose of this case is to consider entering into a Purchase Agreement with Java Properties Background: Java Properties has been working with City staff over the past few months to put together a development proposal on Parcel 50 in the COR. The Development Review Committee has reviewed multiple iterations of the plan and are generally acceptable to the concept included in the packet. Parcel 50 had originally been guided for an office type use but market conditions and the sale of a parcel to Casey's and Java Properties (O'Reilly Auto Parts) open up possibilities for it to develop in a different way. The EDA reviewed this concept plan in October 2021 and directed staff to moved forward with a phased purchase agreement approach with Java to allow time for PACT Charter School to evaluate all options in the City of Ramsey. PACT Charter School notified the city that they no longer had interest in purchasing Parcel 50. Based on the decision by PACT Charter School to remove parcel 50 for consideration for their future high school, Java Properties has decided to make an offer to purchase the entire site (Parcel 50) in a phased approach. The offer price is $4.50 / SF, which is $.0.50/SF less than the asking price for the site. The offer was slightly reduced based on the fact that the cost for the internal roadways for the site likely will be the responsibility of the Developer. The attached Purchase Agreement gives Java control of the entire site for a 6 month period to conduct due diligence, develop a detailed development plan and to secure tenants. The City Attorney has reviewed the attached Purchase Agreement and Term sheet and is comfortable moving it forward to the EDA for consideration; subject to further review. There still may be some modifications to the specific language to protect the city's interest but the general terms allow for the due diligence period to begin. Notification: N/A Observations/Alternatives: The proposed development concept from Java includes a car wash and coffee shop in the initial phase. Future phases, or additions to the first phase, include a restaurant, a general retailer and potentially a grocer. These uses are subject to change but all buildings constructed in the COR will need to meet COR standards or be granted the approvals necessary to receive site plan approval. The City has expressed a willingness to consider cost sharing some of the costs of Peridot St and to pay for the Extnsion of Veteran's Drive. Based on the complexity and timing of this project the below terms are not consistent with a typical purchase agreement. The City attorney has reviewed the term sheet and draft PA and is generally acceptable to moving forward as is. The terms of the purchase agreement are provided below: Real Estate Tax ID Number: Portion of 28-32-25-41-0020. Part of Outlot A, Java Auto Parts (Part of Parcel 50a) Purchase Structure: Phase I with an Option on Phase II (see Exhibit A)