Agenda - Economic Development Authority - 08/08/2024

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Economic Development Authority (EDA) Meeting Date: 08/08/2024 Primary Strategic Plan Initiative: Promote economic growth and development. 4. 1. Title: Consider Execution of Right of Re -Entry Agreement and Refund of Purchase Price (Stories Foundation) Purpose/Background: The purpose of this case is consider execution of the Right of Re -Entry Agreement on Outlot B, COR Stone Brook Academy with Stories Foundation and to refund the purchase price to Stories Foundation. 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 closed session the statute and reason above needs to be referenced along with legal description (Outlot B, COR Stone Brook Academy) and the Anoka County Tax ID number 28-32-25-31-0023. On December 29, 2021, The City of Ramsey sold Outlot B, COR Stone Brook Academy, to Stories Foundation for $67,953.60 to construct a 12,000 SF Cafe'/Store with apartments above. The proposed project also included a rooftop patio. The original Right of Re -Entry Agreement called for the project to be completed with issuance of a Certificate of Occupancy on or before December 31, 2023. Stories Foundation, a non-profit asked the City to extend the Certificate of Occupancy date to December 31, 2024 so it could have more time to resubmit for an updated site plan and to raise more funds for the project. On June 27, 2023 the City Council Agreed to the extension of the Certificate of Occupancy date be extended if Stories Foundation met site plan submittal / Development Agreement / Final Plat conditions noted in Resolution #23-145. Stories Foundation did obtain the necessary site plan/Development Agreement/Final Plat approvals, as agreed to in Resolution #23-145, but unfortunately has not been able to meet fundraising goals and solve for project cost inflation and financing cost. The project costs have increased from 1.8M in 2022-3 to 2.2M in 2024. The Stories Foundation Board of Directors met in July 2024 and made a tough decision to terminate the project in Ramsey based on the above challenges. As part of this hard decision, Stories Foundation has reached out to the City to see if it would be willing to refund the full purchase price. Stories Foundation, as a non-profit hopes that the refunds could be used for their mission to end human trafficking. Per the Right of Re -Entry Agreement, the City has the option to take back the land at no cost to the city or to impose a $50,000 penalty against the property if the Buyer does not obtain the Certificate of Occupancy by December 31, 2024. Notification: None required Time Frame/Observations/Alternatives: The proposed Storyteller Cafe' is a perfect project for a challenging site in the COR in Ramsey. Unfortunately, economics related to building costs, inflation and financing have led to the decision of Stories Foundation to terminate the project in Ramsey. Per the terms of the approved Right of Re -Entry Agreement, the City has the right to re-enter the property at no cost to the City and have Stories Foundation deliver a deed of conveyance back to the City if a Certificate of Occupancy is not obtained by December 31, 2024. Stories Foundation is looking to bring resolution to this matter sooner than December 31, 2024. Staff understands the challenges of a non-profit and the value of cash to move forward the mission of the organization. Based on this, Staff is supportive of a partial refund based on the non-profit nature of this business and Stories Foundation actina in "aood faith" with the recent actions related to Site plan