Consider Second Amendment to Purchase Agreement for Outlot B, COR Stone Brook Academy; Case of Stories Foundation
 

The City of Ramsey and Stories Foundation entered into a purchase agreement on October 29, 2020 and a Purchase Agreement First Amendment on September 28, 2021 to purchase and develop Outlot B, COR Stone Brook Academy.    Stories Foundation has submitted applications for site plan and plat and have received contingent approvals.  There are still some changes that need to be made to the site plan relating to removal of the drive-through and those will be worked out over the next year.  As noted in the original EDA case, Stories Foundation is a non-profit and relies heavily on fundraising for its operations and capital investment.  Stories Foundation has been fundraising and is working with a local bank to obtain financing for its project.  They still are short of their fundraising goal. 

In order the have more leverage relating to financing and fundraising Stories Foundation has asked the City to consider selling the unplatted outlot and to extend the required Certificate of Occupancy form one year after Closing to 2 year after Closing.    They have agreed to enter into a Right of Re-Entry Agreement at Closing that would enable the City to recover the property at no cost to the City if the project does not move forward.  Stories has communicated to the City that it has spent over $60,000 in engineering/design and site plans cost.  As part of the proposed Closing in December 2021 they would also need to pay the City $67,953.60 for acquisition of the outlot.  This level of commitment warrants consideration for an extension as proposed. Staff supports this request and believes an EDA recommendation to Council to move forward with the Second Amendment to Purchase Agreement and  the Right of Re-Entry Agreement is appropriate.

Notification is not required.

Observations:  The site is .52 acres in size with a purchase price of $67,953.60. ($3.00/SF) This price is within the approved "deal range".  The mixed use project will be developed by Stories Foundation.  The project will consist of a Cafe', retail store on the first floor with apartments and a patio on the second floor.  A copy of the preliminary site plan and elevations are attached to the Original Purchase Agreement.   The developer has received approval for a SAC and WAC Deferral loan when the building permit is pulled. 

The following modification are worth highlighting:
 

Closing	Closing date remains on or before December 31, 2021 (subject to title work and closer availability)
Extensions	The Certificate of Occupancy date is proposed to be changed from 1 year after Closing to 2 years after Closing. A Right of Re-Entry Agreement will be entered into at Closing providing the City the legal right to recover the Property if the Project is not Completed and A C/O is not issued 2 years from the Closing.
Legal Description	The legal description of the subject property in the Purchase Agreement is Outlot B, COR STONE BROOK ACADEMY subject to easements as shown on Plat), Anoka County, Minnesota. (the “Property”)  to be platted as Lot 1, Block 1, STORYTELLER CAFÉ ADDITION.

Alternatives:

1. Recommendation to City Council to approve Second Amendment to Purchase Agreement and Right of Re-Entry Agreement for Outlot B, COR Stone Brook Academy as presented; subject to City Attorney review (Staff recommendation)
2. Recommendation to City Council to approve Second Amendment to Purchase Agreement and Right of Re-Entry Agreement for Outlot B, COR Stone Brook Academy with changes; subject to City Attorney review
3. Something else.

This case is being handled as part of normal Staff duties.

Staff recommends an EDA recommendation to City Council to approve Second Amendment to Purchase Agreement and Right of Re-Entry Agreement for Outlot B, COR Stone Brook Academy as presented; subject to City Attorney review

Motion to recommend that the City Council to approve Second Amendment to Purchase Agreement and Right of Re-Entry Agreement for Outlot B, COR Stone Brook Academy as presented; subject to City Attorney review