Consider Second Amendment to Purchase Agreement for Greenway Terrace 2; Case of AEON Ramsey 2 LLC (portions may be closed to the public)

Purpose:
Review request to extend/amend purchase agreement for AEON Ramsey 2 LLC to January 13, 2020.

Background:
AEON (Greenway Terrace) constructed a 54 unit affordable housing project that has now opened in the COR.  The Developer has entered into a purchase agreement to buy and develop the land adjacent to Phase 1 and complete Phase 2 of the project.

On June 14, 2017, the City of Ramsey entered into a Purchase Agreement to sell Outlot A, Greenway Terrace, to AEON Ramsey 2 LLC for $123,368.  The City received $10,000 in earnest money which is now non-refundable. The term of the agreement was until October 13, 2018.  An option to extend closing for up to two 90 day periods was included in paragraph 17.1 and required deposit of an an additional $10,000 in non refundable earnest money. 

On May 22, 2018, AEON Ramsey 2 LLC and the City of Ramsey executed the Purchase Agreement First Amendment. The City of Ramsey received an additional $10,000 in non-refundable earnest money. The terms of this agreement state that Closing on the property must occur on or before October 13, 2019.  There is no reference to extending the Closing date in the First Amendment.

To date, the City has received $20,000 in non-refundable earnest money from AEON Ramsey 2 LLC from the original purchase agreement and the first amendment.  The City Council is being asked to review the general terms of the Second amendment.

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On April 18, 2019, AEON sent an email requesting that the City of Ramsey consider another extension/amendment to the Purchase Agreement First Amendment to move the Closing date out to to accomodate for the Minnesota Housing Application process.  AEON is submitting a grant application to Minnesota Housing that is due on June 3, 2019 with a preliminary application due on May 17, 2019.  The Minnesota Housing application requires that the purchase agreement extend past the award date which is November 21, 2019. The current purchase agreement terminates on October 13, 2019.  Further discussion with AEON has indicated that the request for the extension/amendment would be to January 13, 2020 and would include an additional $10,000 in non-refundable earnest money.

Due to the short request of a 90 day extension, Staff is comfortable recommending the purchase price remain at $123,368.  However, if another extension beyond that date were requested, Staff would recommend opening negotiations, including the land price, earnest money amount and all terms of the purchase agreement.  AEON Ramsey 2 LLC is comfortable with the proposed terms.

The Ramsey EDA reviewed this request at the May 9, 2019 EDA meeting and recommends moving forward with the Purchase Agreement Second Amendment.

This item would be covered under normal staff duties.

The EDA recommends approving the Second Amendment to the Purchase Agreement with AEON Ramsey 2, LLC  to extend the closing date until January 13, 2020, including an additional $10,000 in non-refundable earnest money.  All other terms, including the purchase price are to remain the same.

Motion to Approve Second Amendment to the Purchase Agreement with AEON Ramsey 2, LLC, subject to approval by the City Attorney as to legal form.