Consider Approval of Purchase Agreement and Right of Re-Entry Agreement for 6591 141st Avenue NW; Case of Blanery LLC (portions of the meeting may be closed to the public)

The purpose of this case is to consider an EDA recommendation to the City Council to sell 6591 141st Avenue NW (Tax ID 27-32-25-44-0003) (approximately 0.95 acres) to Blanery LLC (the "Developer") to construct a minimum 8,500 SF, two level auto body shop with offices above. 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 the address (6591 141st Avenue NW Ramsey, MN 55303), legal description (a portion of the N 200 feet of the South Half of Southeast Quarter of Section 27, Township 32, Range 25) and the Anoka County Tax ID number 27-32-25-44-0003. 

This property was acquired by TIF/CDBG Funds for redevelopment in 2006 for $211,200. CDBG funds were used to demolish the building and grub trees in 2008.  The property is listed for $105,000 and the Buyer's offer is for the full sale price. It should be noted that there is a monitoring well on the SW corner of the property that cannot be moved (from St. Paul Terminal remediation project) which also factors into the sales price of $2.54/SF.  The proposed 8,500 SF, two level building will maximize the development of the site.  The proposed use of auto body repair and office is allowed in the I-1 zoning district with a conditional use permit.  Planning Staff has reviewed the preliminary site plan and generally supports the site layout. The purchase price is at the top of the "Deal Range" which is the full asking price for this parcel.

None required

This site has been marketed since the demolition of the building in 2007.  Staff has received interest from adjacent land-owners and others over the past 15 years but nothing has moved forward to the level of a purchase agreement.  Staff is supportive of this business use in this location and the developer is committed to screening the site.  

The sale of this property will bring this property back onto the tax rolls.  Staff has estimated the tax-assessed value to be approximately 1.4M when completed, which results in approximately $36,000 in annual total property taxes, $10,000 being collected by the City.  Expected job creation on the site is estimated to be 6 FT employees at the body shop and an additional 15 PT employees utilizing the offices upstairs.  This is a solid project that results in the creation of tax base and jobs which is the mission of the EDA.

Aliaksandr Blashchanitsa from Blanery LLC will be in attendance to provide more details relating to the proposed project and to answer questions the EDA may have.

Project Highlights
Project Description - 8,500 SF Auto Body Shop / Office 
Job Creation - 6 FT Employees at Body Shop up to 15 additional PT employees in the upstairs offices 
Tax Assessed Valuation (Estimate) - 1.4M
Annual Property Tax (Estimate) - $36,000
Annual Property Tax - City Portion (Estimate) - $10,000
Zoning - I-1. Conditional Use Permit required.

Key Purchase Agreement Terms
Buyer - Blanery LLC
Seller - City of Ramsey                                         
Property Address - 6591 141st Avenue NW Ramsey, MN 55303
Legal Description - Unplatted
PID# - 27-32-25-44-0003                                  
Acres - Approximately 0.95 acres
Purchase Price - $2.54/SF
Earnest Money  - Earnest Money of $10,000.00 will be held by Land Title, Inc. upon full execution of Purchase Agreement. Said deposit would be refundable to Buyer in the event that a Notice to Proceed is not given by the Buyer at the end of the Inspection Period. 
Commission - This was a City Generated lead from the City MNCAR Listing with ACRED. The City has negotiated a 3.5% commission ($3,675) for the Buyer's Agent (Excelsior Realty)
Inspection Period - Buyer shall have one hundred eighty (180) days following Effective Date to investigate property.
Right of Re-entry - Within 12 months from the Closing Date, the Buyer shall have completed construction of a minimum 8,500 SF Auto Body Shop with Upstair Offices and have obtained a Certificate of Occupancy. Zoning requirements to be further defined by an approved Site Plan.  At Closing, a “Right of Re-Entry Agreement” shall be executed and recorded against the Property. 
Closing - Closing shall take place 30 days after Buyer delivers Notice to Proceed to Seller. Two (2) additional Sixty (60) day extensions will be granted with each extension requiring a $10,000 earnest money deposit that is nonrefundable but applicable to the purchase price.

Alternatives include:
1) Recommendation to the City Council Approval of Purchase Agreement and Right of Re-Entry Agreement with Blanery LLC (as presented); subject to City Attorney review.
2) Recommendation to the City Council Approval of Purchase Agreement and Right of Re-Entry Agreement with Blanery LLC (with changes); subject to City Attorney review.
3) Something else.

N/A. There is no assistance being provided.

Motion for EDA recommendation to the City Council for approval of the Purchase Agreement and Right of Re-Entry Agreement with Blannery LLC (as presented); subject to City Attorney review. (Staff Recommendation)