Adopt Resolution #23-206 Approving First Amendment to Purchase Agreement for Portion of Outlot A, Ramsey Properties Addition; Centra Homes LLC

The purpose of this case is to consider approval of the First Amendment to Purchase Agreement for the Sale of Outlot A, Ramsey Properties Addition to Centra Homes LLC.  Staff considers this request somewhat of a clerical change based on the uncertainty of the certificate of occupancy dates without a firm Closing Date.  Staff anticipates a closing date around March 2023.  The Developer is expected to commence site improvement grading sometime in the spring with roads and utilities to follow afterwards.  The City will likely be working on road construction and utilities for Zeolite Street NW and a segment of West Ramsey Parkway NW during the 2024 construction season. Based on the uncertainty of the Closing date and the uncertainty of the availability of utilities for the project, Staff and the Developer are not comfortable setting a specific date of December 31, 2024 for the requirement of 8 certificates of occupancy for the project as this date is too aggressive. The proposed language which is identified below in the Alternative Section, ties the certificate of occupancy dates to the closing date which will give the developer sufficient time to complete the project in with the spirit of the original purchase agreement of eight houses per year once the infrastructure gets put in. Tying the Right of Re-Entry Agreement to a Closing Date is what is typically done for commercial projects.

 

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The only change being proposed to the Purchase Agreement is tie the required certificates of occupancy dates in the Right of Re-Entry Agreement to the Closing date.  Staff considers this change somewhat clerical but wanted to give the City Council an opportunity to review and formally consider approval.

New Language Proposed in First Amendment to Purchase Agreement:

28. CONSTRUCTION DEADLINE.  The project consists of 103-unit owner occupied detached townhomes.  Buyer shall obtain certificates of occupancy for the construction of forty (40) single family townhomes pursuant to the following schedule:

Construction Deadline Schedule:
Eight (8) certificates of occupancy within sixteen (16) months after Closing;
A total of sixteen (16) certificates of occupancy within twenty-eight (28) months after Closing;
A total of twenty-four (24) certificates of occupancy within forty (40) months after Closing;
A total of thirty-two (32) certificates of occupancy within fifty-two (52) months of Closing;
A total of forty (40) certificates of occupancy within sixty-four (64) months of Closing.  
 
Each total certificate requirement outlined above shall include all certificates of occupancy received during the current deadline period and all prior deadline periods. For instance, if sixteen (16) certificates of occupancy are received within sixteen (16) months after Closing, Buyer shall have no requirement to obtain any additional certificates of occupancy within twenty-eight (28) months after Closing.
 
At Closing, a “Right of Re-Entry Agreement” must be executed, in substantially the same form as attached hereto as Exhibit C, and recorded to the Property providing that, in the event any of the above deadlines are not met, Seller has the right to reclaim title to the parcels for which certificates of occupancy have not been obtained, or in the alternative, and at Seller’s sole discretion, Buyer shall pay Seller $20,000 for each certificate of occupancy that is not obtained pursuant to the deadlines set forth above.

Alternatives:
1) Motion to adopt Resolution #23-206 Approving First Amendment to Purchase Agreement for Portion of Outlot A, Ramsey Properties Addition; Centra Homes LLC - (as presented); subject to City Attorney Review
2) Motion to adopt Resolution #23-206 Approving First Amendment to Purchase Agreement for Portion of Outlot A, Ramsey Properties Addition; Centra Homes LLC - (with changes); subject to City Attorney Review
3) Something else

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