New Policy for the Sale of City Owned Land and Template Purchase Agreement

Purpose
With the recent dissolution of the Ramsey HRA, it was recommended by the Council that the City consider a new policy for selling City-owned land; and a "template" purchase agreement.  The purpose of this case is to consider adopting the attached new Policy for the Sale of City Owned Land and template purchase agreement (PA).

Background (HRA Dissolution)
The City Council has officially dissolved the Ramsey Housing and Redevelopment Authority (HRA).  In November 2014 the HRA passed a resolution to transfer all HRA assets to the City and to dissolve the HRA (attached to case).  HRA assets include a large inventory of City-owned land located within The COR.  In December 2014 the City Council held a public hearing to dissolve the HRA.  As a result of the HRA dissolution, a number of HRA responsibilities were anticipated to be shifted to the EDA.  A major responsibility included reviewing purchase offers for all property previously owned by the HRA (i.e. The COR and the former bookstore site).

Background (Policy)
Attached to this case is the proposed land sale policy.  The intent of this policy is to route all land sale transactions through the EDA for a recommendation to the City Council.  This policy is intended to be flexible, to account for special/ market circumstances.  Included in this policy is updated language from the City's previous policy for selling City-owned land; which was called a disposition policy (concentrated on previous park land).

In summary, this new policy covers three major areas: (1) governance, (2) required terms and conditions for purchase agreements, and (3) processes (surplus city owned land process, marketing process, sale process, net proceeds). This policy has been reviewed by the EDA a number of times, beginning in December 2014  .  This policy was reviewed by the Planning Commission in February of 2015.  Lastly, this policy has been reviewed by the City Attorney and the City's real estate broker CBRE.

Background (Template PA)
Attached to this case is a "template" PA.  This template PA will be utilized by staff as a starting point for land sale negotiations.  In most cases, the template PA will be amended as result of negotiations with prospect buyers (on a case-by-cases, site-by-site basis).  In some cases, the prospect buyer may strongly desire to utilize their own purchase agreement document.  In said cases, staff will utilize the City's policy for the sale of City owned land to guide contract negotiations.  This template purchase agreement addresses all items outlined in the policy for the sale of City owned land.  This template purchase agreement was drafted by the City Attorney Joseph Langel based on input from the EDA.  Tom Bray, whom holds a real estate certification for Attorneys, also reviewed this document.  This template PA was reviewed by the EDA in April.

 

NA

Staff would recommend approving the attached policy and template purchase agreement.  Below are discussion points.

(+) Reviewed and amended by the City's real estate broker CBRE, the City Attorney, and Tom Bray.
(+) Establish a formal, equitable and efficient process for the sale of city owned land (for the City and prospects).
(+) Establish decision-making criteria to aid policy makers as they consider offers to purchase city owned land.
(+) Establish general policy direction to aid staff as they negotiate with prospect buyers interested in purchasing city owned land.
(+) This policy will increase the effectiveness of City staff (from an economic development prospective); and increase the efficiency of land-sale negotiations.

(-) Additional red-tape and process for developers and prospects.  Potentially, delay or de-rail projects.  NOTE: policy was built to be very flexible; the EDA spent a lot of time making sure this concern wouldn't come to fruition.
(-) potentially set an unrealistic expectation that all contract negotiations will result in 100% acceptance of this new policy/ template PA by prospect buyers.  NOTE: all deals have unique circumstances that may require deviation from this policy and template PA; which is not uncommon in the real estate market.

NA

The EDA has reviewed this case a number of times, beginning in December of 2014.  The attached policy and template PA have been amended/ improved/ revised by the EDA on multiple occasions as a result of recent experiences with reviewing PAs (24 Restore, All Seasons Garage, PSD LLC, NIK Management).

The EDA passed a motion in April to recommend the City Council adopt the attached policy and template PA.  General reasons for EDA support are outlined in the "observation" section of this case.
 

Motion to:
Approve the attached policy for the sale of City owned land and draft purchase agreement.