7.5.
CC Regular Session
- Meeting Date:
- 07/25/2017
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title:
Riverstone Development Purchase Agreement [portions may be closed to the public]
Purpose/Background:
PURPOSE
The purpose of this case is to consider approving the attached purchase agreement with Capstone Homes (Riverstone Development).
BACKGROUND
This purchase agreement comes to the city as a result of the proposed 298-unit Riverstone Development which received preliminary plat approval by the City in June (final plat approval expected on July 25). Please see attached preliminary plat. A portion of this development requires the realignment of Puma street, and subsequently, the purchase of city-owned land by Riverstone.
The purpose of this case is to consider approving the attached purchase agreement with Capstone Homes (Riverstone Development).
BACKGROUND
This purchase agreement comes to the city as a result of the proposed 298-unit Riverstone Development which received preliminary plat approval by the City in June (final plat approval expected on July 25). Please see attached preliminary plat. A portion of this development requires the realignment of Puma street, and subsequently, the purchase of city-owned land by Riverstone.
Notification:
Observations/Alternatives:
OBSERVATIONS
Listed below are terms/ conditions/ observations related to the attached purchase agreement that staff considers important to highlight for potential discussion.
Staff has no policy compliance concerns.
This project is not requesting a formal business subsidy, the City's Revolving Loan Fund, or State DEED Programs. The attached PA is simply an edited version of the City's adopted "template PA." Therefore, generally appears to be in compliance with City's Land Sale Policies.
(2) Offer Price
$25,000 per acre 47 cents psf ($47,500 estimated total).
The buyer is making an offer that is at the low end of the City's standard deal range for green field residential land. However, it is within the City's acceptable/ adopted deal range. If desired, this item should be discussed in closed session.
It should be noted, Capstone Homes (Riverstone Development) believes $25,000 per acre is the market rate for residential land--this is their direct experience in the nearby marketplace (with other recent purchase agreements). Also, this property is not currently served by sewer/ water, and will be responsible for future arterial infrastructure assessments. This is the rationalization for the proposed purchase price.
It should be noted, Capstone Homes (Riverstone Development) believes $25,000 per acre is the market rate for residential land--this is their direct experience in the nearby marketplace (with other recent purchase agreements). Also, this property is not currently served by sewer/ water, and will be responsible for future arterial infrastructure assessments. This is the rationalization for the proposed purchase price.
(3) Earnest Money
$5,000, to become hard after inspection period.
(4) Inspection Period
February 08, 2018 (July 15, 2018 closing). This is consistent with the PA in place with Pearson Properties for the north half of this project.
(5) Extension Option
If the buyer decides to extend the PA, they will be required to place $5,000 of additional non-refundable dollars in earnest for each 60 day extension.
Funding Source:
NA
Recommendation:
STAFF
Staff is comfortable with this proposed purchase agreement. It fits within City policies/ procedures. Land proceeds are to be dedicated to the City's Park Fund (per previous agreements). CBRE commission will be paid via land proceeds, and per our listing agreement. This transaction is a direct result of the city's desire to realign Puma Street (i.e. Capstone didn't seek the purchase of this property originally, the City made this request/ suggestion). The sale price matches the market rate (i.e. nearby/ recent purchase agreements for similar property).
Staff does not feel there is a need to go into closed session. If the Council does desire to further negotiate price, staff would suggest going into closed session. In closed session, staff would suggest deciding on an agreeable price. Then, in open session, pass a motion to approve the purchase agreement with the updated price.
Staff is comfortable with this proposed purchase agreement. It fits within City policies/ procedures. Land proceeds are to be dedicated to the City's Park Fund (per previous agreements). CBRE commission will be paid via land proceeds, and per our listing agreement. This transaction is a direct result of the city's desire to realign Puma Street (i.e. Capstone didn't seek the purchase of this property originally, the City made this request/ suggestion). The sale price matches the market rate (i.e. nearby/ recent purchase agreements for similar property).
Staff does not feel there is a need to go into closed session. If the Council does desire to further negotiate price, staff would suggest going into closed session. In closed session, staff would suggest deciding on an agreeable price. Then, in open session, pass a motion to approve the purchase agreement with the updated price.
EDA
The EDA discussed this case on 7/13, in open session only. The EDA is generally supportive of this purchase agreement and is excited for the Riverstone project. The EDA recommends the City should sell this land to Riverstone. The EDA did specifically suggest staff counter-offer Riverstone's original offer price. The original Riverstone offer price was $25,000 per acre. Staff did provide Riverstone with a counter-offer ($35,000 per acre). Riverstone has indicated they are not willing to accept the EDA's counter offer--as they believe the market price is $25,000 (based upon recent land transaction in the immediate area)--and they feel $35,000 is unreasonable. Attached are EDA minutes.
Action:
Motion to:
Adopt the attached purchase agreement between the City of Ramsey and Riverstone Development for roughly 1.9 acres of city-owned land.
Adopt the attached purchase agreement between the City of Ramsey and Riverstone Development for roughly 1.9 acres of city-owned land.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Kathy Schmitz | 07/17/2017 02:48 PM |
| Kurt Ulrich | Kurt Ulrich | 07/17/2017 03:45 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 07/14/2017 06:32 PM
- Final Approval Date:
- 07/17/2017