Agenda - Economic Development Authority - 02/08/2024

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Economic Development Authority(EDA) 4. 2. Meeting Date: 02/08/2024 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development Title: Consider Approval of Purchase Agreement and Right of Re-Entry Agreement for Lot 2,Block 1, COR FOUR (Portions may be closed to the public) (CASE REVISED 2.6.24) Purpose/Background: Purpose: The purpose of this case is to consider entering into a purchase agreement with Garage RE LLC (Take 5)or Midland Atlantic Development Company(Valvoline)to purchase and develop an oil change business onLot 2, Block 1, COR FOUR. 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(Lot 2, Block 1, COR FOUR) and the Anoka County Tax ID number 28-32-25-23-0023. Background: City Staff has been working with Take 5 and Valvoline for over 6 months. Both have expressed interest in developing the 1.16 acre site south of the Aldi under construction. Staff has reviewed the two proposals and they are similar for the purchase price and the request to discount the purchase price for construction of a required parking lot south of the site of the oil change development. However,there are significant differences related to the willingness to enter into a standard Right of Re-Entry Agreement and the request for a buyback provision if the project doesn't move forward. Take 5 is willing to enter into our standard city Right of Re-entry Agreement for their oil change development and Valvoline is not. Take 5 has provided a site plan showing the oil change business and a future development of the remnant parcel. Valvoline submitted a revised proposal on Friday, February 2nd that includes a site plan showing a development plan for the remnant parcel. Both parties offered $404,23 6 ($8.00/SF), full listing price, and asked for a discount for an offsite parking lot that will be required as part of the development of this parcel. Valvoline Cost estimate for the additional parking lot results in a larger purchase price for the city of about$15,000. Parking Lot Construction The First Amendment to Declaration of Easements, Covenants and Restrictions for COR Two requires the City/Future Developer to construct a 20 space parking lot north of Northstar Marketplace when Lot 1,Block 1 COR Two (now generally Lot 2, Block 1, COR FOUR) develops. Staff received two estimates for this offsite construction and the pricing averaged$125,000 in additional expense for the developer. Staff has deducted $125,000 from the Purchase Price of$404,236 for a net of$279,236 for the Take 5 Development included in the proposed Purchase Agreement with Garage RE LLC (Take 5). Take 5 has agreed to construct this additional parking lot as part of their 1,800 square foot oil change development. Valvoline's Lot price has been discounted $110,000 based on the cost estimate for the parking lot provided by their contractor. Notification: Notification is not required. Observations/Alternatives: