Agenda - Economic Development Authority - 08/10/2023

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Economic Development Authority (EDA) Meeting Date: 08/10/2023 Primary Strategic Plan Initiative: (A! Aud_pd84) 4a,1 4. 1. Title: Consider Approval of Purchase Agreement and Right of Re -Entry Agreement for Part of Outlot A, COR TWO: Norhart Architecture, LLC Purpose/Background: The purpose of this case is to consider a recommendation to the City Council to sell approximately 4 acres of Outlot A, COR TWO to Norhart Architecture, LLC (the "Developer) to construct a 200 unit market rate apartment project. Staff brought this proposed project to the City Council worksession to determine if there was general support for the sale of City property in the COR for a market rate apartment project. The project was generally well received by the Council and Staff has been working with the developer on the terms of a purchase agreement since that meeting. Staff has worked diligently with Norhart, and legal counsel to draft a Purchase Agreement and Right of Re -Entry Agreement that all parties are comfortable with. The purchase agreement and right of re-entry agreement have provisions similar to the Affinity at Ramsey (174 unit 55+ senior project) that extend deadlines for performance and restricts the city ability to re-enter the property if a building permit is pulled, a foundation is constructed and evidence of construction financing has been provided to the city. Staff has discussed this at great length with the City Attorney and the requests by the developer are not uncommon based on the ability to obtain financing for a project of this magnitude. The City will still have the ability to impose a $100,000 penalty if the project is not completed by 2027. The negotiated purchase price for the land is $2.50 per square foot ($435,600) which is within the City deal range for this parcel. Norhart has also committed to contribute $256,000 toward the construction of West Ramsey Parkway NW. If the contribution of $256,000 for West Ramsey Parkwayis taken into account the total consideration is $691,600, or $3.97 per square foot which is over the asking price of $3.50/SF. It should be noted that the Developer is not asking for any financial assistance or a reduction in development fees from the city. Notification: None required Time Frame/Observations/Alternatives: Staff believes that this project will be a great addition to the COR and will provide a visibly appealing project at the entrance of the COR. The 200 units of high -end market rate housing and its proximity to the retail area and future Waterfront park will provide great synergy and walkability. The property tax revenues for a project of this size help finance past, current and future infrastructure improvements in the COR. Representatives from Norhart will be present to provide more detail relating to the proposed project and to answer questions the EDA may have. Project Highlights Project Description - 200 Units - Market -rate, 5,000 Retail Cap on West Side of Building (Mixed Use) Project Costs - 45M Amenities - On Site Staffing, Community Room, Game Room, Coffee Station, Fitness and Yoga Center, Dog Run, Pet Spa, Movie Room, Outdoor Lounge & Pool, Heated Underground Parking Job Creation - 6