Agenda - Council - 04/26/2022 - Laserfiche WebLink

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Observations: Letter of Intent Considering that the Developer has shown the ability and financial capacity to build a project from the ground up (Delta ModTech) and the continued interest in further investment in Ramsey, Staff is asking the City Council to consider entering into the attached LOI. The LOI gives the Developer 90 days to complete the Demand Market Study and to work on the the specific details of a formal Purchase Agreement. The cost of this LOI is $5,000 which is refundable if the Developer decides not to move forward with a PA. If the the Developer submits a business subsidy application and enters into a PA the $5,000 will be retained to cover the costs of TIF Analysis and TIF Agreement. The City Attorney has reviewed the attached LOI as to form and is comfortable with entering into the agreement. General Project Description(to be further refined) . 60 unit, Three Story Hotel with hot breakfast and indoor pool; a Certificate of Occupancy one year after Closing (could be extended to 16 months based on supply chain issues or force maj eure). If this is not done, the City may exercise the Right of Re-Entry. .Estimated Assessed Value 5-6M •Estimated Taxes - $155,000 annually Future Purchase Agreement The Developer would like to understand the willingness of the EDA to consider the terms similar to the proposed Cobblestone project that provided an upfront land cost right down in the form of TIF. The preliminary terms of negotiations of a future PA are listed in the Term sheet of the LOI. The City Council could go into closed session to discuss negotiation strategies and counteroffers if necessary. Alternatives: 1)Adopt Resolution#22-095 Entering into Binding Letter of Intent for Outlot A, Gigi Addition; Case of The Schiebout Family Limited Partnership, LLLP (as presented); subject to City Attorney Review(EDA recommendation). 2)Adopt Resolution#22-095 Entering into Binding Letter of Intent for Outlot A, Gigi Addition; Case of The Schiebout Family Limited Partnership, LLLP (with changes); subject to City Attorney review. 3)Do not enter into LOI an continue to work with The Schiebout Family Limited Partnership, LLLP and other interested parties. 4) Something else. Funding Source: This case is being handled as part of normal Staff duties. If financial assistance is provided, TIF District 14 will be a funding source. Recommendation: The EDA met on April 14, 2022 and unanimously recommended that the City Council enter into the attached LOI with The Schiebout Family Limited Partnership,LLLP (as presented), subject to City Attorney review. In addition, The EDA was generally supportive of the future purchase agreement terms that included consideration on an up-front land cost write down for the property. These terms will still need to be reviewed again by the EDA and City Council if the LOI is moved forward and a purchase agreement is presented for consideration. Action: Motion to Adopt Resolution#22-095 Entering into Binding Letter of Intent for Outlot A, Gigi Addition; Case of The Schiebout Family Limited Partnership, LLLP (as presented); subject to City Attorney Review Attachments