Agenda - Economic Development Authority - 01/09/2025

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Economic Development Authority (EDA) Meeting Date: 01/09/2025 By: Sean Sullivan, Community Development 4. 1. Title: Consider Approval of Amended and Restated Right of Re -Entry Agreement: Ramsey Properties, LLC Purpose/Background: Ramsey Properties, LLC purchased Lot 1, Block 1, Ramsey Properties Addition from the City of Ramsey on August 22, 2023. The cost for the land was $1.00 with an assigned value of $434,511. (TIF) The closing required the filing of a Right of Re -Entry Agreement requiring a Certificate of Occupancy for a 98 Unit Hilton Home2Suite Hotel by January 22, 2025. Substantial progress has been made on the project and the project construction is in the final phase but it will not be completed by January 22, 2025. Factors including, supply chain delays (windows), a change in the project management team, changes in the scope of the project by the franchise partner and changes required by the State of Minnesota building code have pushed the project finish date out longer than anticipated. The developer has asked the City of Ramsey to consider extending the Certificate of Occupancy date in the recorded Right of Re -Entry Agreement from January 22, 2025 to June 30, 2025. (see attached letter) The purpose of the Right of Re -Entry Agreement is to prohibit land speculation and to guarantee a certain type of development to occur when the City sells City -owned property. Based on the substantial construction completed for the 98 unit Hilton Home2Suites Hotel, it is obvious that the Developer is not holding the land for speculation purposes and is acting in good faith to complete the project. The current recorded Right of Re -Entry Agreement has two remedies that the City could exercise upon Ramsey Properties in the event that a Certificate of Occupancy is not issued by January 22, 2025. One option is to re-enter the property and take possession. The other option would be to impose a $50,000 penalty on the Developer and to let the Developer retain the property. In the event that an Amended and Restated Right of Re -Entry Agreement is not approved the EDA should be prepared make a recommendation on which remedy to exercise. Based on the substantial completion of the project and the rationale for the extension of the C/O date to June 30, 2025, Staff recommends approval of the Amended and Restated Right of Re -Entry Agreement and not to exercise remedies in the existing Right of Re -Entry Agreement. Notification: Notification is not required. Observations/Alternatives: Observations: Ramsey Properties, LLC is requesting the Certificate of Occupancy date in the recorded Right of Re -Entry Agreement be changed from January 22, 2025 to June 30, 2025. Although it is possible that the project could be completed much sooner than the requested June 30, 2025 date, Staff supports the longer time frame based on the previous delays to the project and to provide some flexibility if there are other unforeseen delays. The EDA must determine if this request is reasonable and make a recommendation to the City Council. Staff has put together a number of alternatives to consider based on the consensus of the EDA. Alternatives: Option 1 - Approve Extension of Right of Re -Entry Agreement from January 22, 2025 to June 30, 2025 1. Motion to recommend to the City Council to approve the Amended and Restated Right of Re -Entry Agreement (as presented); subject to City Attorney review.