Agenda - Economic Development Authority - 08/11/2022

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Economic Development Authority (EDA) 4. 1. Meeting Date: 08/11/2022 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development Title: Consider Purchase Agreement for Outlot A, Gigi Addition; Case of Schiebout Family Limited Partnership (Portions may be closed to the public) Purpose/Background: The EDA may choose to go into closed session pursuant to Minnesota Statutes section 13D.05, subdivision 3(c)(3) to consider offers or counteroffers for the purchase or sale of real or personal property. If the EDA chooses to enter into to closed session the statute and reason above needs to be referenced along with legal description (Outlot A, Gigi Addition) and the Anoka County Tax ID number 28-32-25-23-0020. The purpose of this case is to consider a purchase agreement to sell Outlot A, Gigi Addition. Staff has been working with The Schiebout Family Limited Partnership, LLLP (the "Developer") over the the past year. This ownership group has the same members of the Delta Mod Tech project and they want to do more to help build their business and this community. This group has shown that they have the capacity to build a project from the ground up and be successful. The Developer been in discussions with major hotel flags like Hilton and Marriot and are close to making a decision. The developer is new to the hotel business and is relying on other experts in the industry and at the City to help guide them through the development process. The group is aware of the Cobblestone project and the financial TIF assistance the City committed to, and would like to do of something similar size (around 60-80 units)but not including a steak house. The group has reviewed pre-Covid Market Demand Study information that supports investment in Ramsey but asked for more time to conduct a more current demand analysis to re-evaluate the Ramsey market. The Developer has completed its demand study that was supported by the EDA. Review of the demand study by the Developer is promising and the developer is asking to move forward with a purchase agreement with the terms that were outlined in the LOI reviewed by the EDA and approved by the City Council in April. With the impacts of Covid-19 lessening and the hotel market slowly recovering,there will be an ask for assistance for the project in the form of a land cost write down in the executed LOI and Draft Purchase Agreement. Like the proposed Cobblestone project,a third party analysis will need to be done by Ehler's to see if assistance is truly warranted at a later date. Construction costs for projects over the past few years have increased greatly impacting the expected rate of return for new construction. In the event that the EDA and City Council are comfortable entering into a purchase agreement with TIF contingencies, Staff would ask the developer to submit a business assistance application to be acted on in a separate action by the EDA and City Council at a later date. The attached Draft Purchase Agreement allows for an 180 day inspection period which will give time for the Developer to work through the City TIF assistance, site plan and platting processes. Staff is looking for EDA to provide a recommendation to the City Council in support of the Draft Purchase Agreement. Notification: Notification is not required. Observations/Alternatives: