Purchase Agreement Amendment for Imperial Development for Purchase of 5195 142nd Ave NW

The purpose of this case is to review the attached, requested Amendment to a Purchase Agreement (PA) between the City of Ramsey and Imperial Development Company. The original agreement, which is attached, was executed per Council direction, in early June.

Imperial Development Company has brought forward a request to amend the existing PA to allow for an additional 180 days of time for their inspection period-- equating to a total of 360 days (inspection thus ending in June of 2015 with closing following by no more than 30 days). The current PA allows for 180 days. The reason for the request by Imperial Development Company is as follows. Imperial's client has reached their 2014 goal of new store builds/land acquisitions across the Country. Imperial's client has requested Imperial not to submit Ramsey for moving forward until a committee meeting in December. The current inspection period ends in December. As the committee meets in December, they are requesting an extension of time for inspection to allow time to conduct surveying, testing, etc. in order to close and begin construction in a timely manner. It is expected construction will begin in 2015, pending a motion at their committee meeting in December of 2014.

On July 22nd the Council countered Imperial's request with an ask for non-refundable earnest money. This request was respectfully made based on the language within the executed purchase agreement regarding closing date extensions ($1,000 per 60 days of extension). The Council's request was to see $3,000 of non-refundable earnest money in exchange for extending the inspection period for an additional 180 days ($1,000 multiplied by three, sixty day units). The Council reiterated its interest in the project and dedication to Imperial.

Staff continued negotiations with Imperial. Imperial's counter is attached and labeled as "Revised Addendum". This addendum provides for $2,000 of non-refundable earnest money (at execution of the addendum) in exchange for 180 days of extension for inspection. Imperial feels this figure, and granting it as non-refundable, more closely matches the basis of the executed purchase agreement. Imperial feels, given their original $1,000 and the existing inspection period of 180 days, that $1,000 per 180 days more closely matches the agreement. As an example, Imperial stated that if they were at a place to close on the property but needed an extension, they would provide $1,000 per 60 days (non-refundable) as they know they will close on the property and development will occur. At this point, Imperial is requesting an extension of the Inspection period and offering their earnest money as non-refundable to satisfy the request of the Council-- not knowing if the project will close or development will occur. Per the executed contract, at any time during the inspection period Imperial may determine the site unfeasible for development and withdraw along with their earnest money. This addendum offers non-refundable earnest money for an extension of the inspection period thus going "above and beyond" the merit of the purchase agreement.

 

Alternative 1: Grant Imperial Development Company an extension of time, per the attached proposed amendment to the original PA. This allows our Agreement for development to continue. This extension also affords Imperial that much more time (additional 180 days) to say no to developing in Ramsey.

Alternative 2: Decline granting Imperial Development Company an extension of time threatening the likelihood of a development occurring on this parcel. Staff does not recommend this alternative. As discussed previously, this site is bound by recorded restrictions from the previous Seller, Amoco/BP Products of North America. Very few uses are allowed on this property until 2020, at which point the restrictions expire. Other uses do exist; however, given proximity to similar allowable uses along the HWY 47 corridor, Staff and CBRE feels the marketability of this site is limited. This site will continue to be marketed allowing for other leads to "fill the pipeline"; should the development of a Dollar General not occur, we could have a lead due to continued marketing. To date their is no other active lead for this property.

Staff recommends a motion allowing for execution of the attached Amendment to the original Purchase Agreement between the City of Ramsey and Imperial Development Company.

Motion to execute the attached Amendment to the original Purchase Agreement between the City of Ramsey and Imperial Development Company.