Adopt Resolution #20-179 Approving Third Amendment to Purchase Agreement with Ramsey Hotel Group LLC

Purpose:
Ramsey Hotel Group LLC has requested the City extend the Inspection Period from August 30, 2020 to August 3, 2021 due to the Covid-19 Pandemic and its impact on the hospitality industry.  The EDA has subsequently made a recommendation to only extend the Inspection Period to March 1, 2021.

Background:
The Covid-19 Pandemic has greatly impacted  hospitality, retail and service businesses.  The uncertainty as to when these sectors will return to "normal" market conditions is causing many projects to pause in their plans for growth.  Staff believes the request to extend the Inspection Period to allow for more certainty of market/operations for the business is warranted.

The Buyer is required to give a Notice to Proceed by the Inspection Period date.  Providing a Notice to Proceed starts the clock for scheduling the Closing (30 days, unless Buyer purchases an extension) per the terms of the Purchase Agreement.  On July 28, 2020, the City Council adopted the Second Amendment to Purchase Agreement extending the Inspection Period date from August 3, 2020 to August 30, 2020 to give Staff and the Developer time to find a mutually agreeable solution to extend the Inspection Period date and/or to delay the required Closing date.

N/A

Observations:
Ramsey Hotel Partners has received City Council Site Plan Approval for the proposed 60 Unit hotel with Pool and restaurant.  They have also received Final Plat Approval from the City for the required subdivision.  The City Council has approved a TIF agreement that will allow for 100% reimbursement for the land acquisition cost of the development property.  Staff understands the impact that Covid has had on this industry and generally supports the request by the developer to extend the Inspection Period and Closing Date.  The EDA discussed this proposed Third Amendment at great length which is included in the draft minuted.  Staff has drafted the attached Third Amendment to Purchase Agreement that includes the EDA's recommendation  to extend the Inspection Period Date 6 months until March 1, 2021.   No other terms or conditions of the PA are being changed in their proposal.  This serves as a good starting point to discussions moving forward.

If the City Council deems it necessary to amend the EDA recommendation and include other provisions or deadlines to the Third Amendment it could consider the following options:  

1. Provision of non-refundable cash by the developer to the City to extend the the Inspection Period 1 year.
2. Reduction of City requirement to refund $3,500 in accumulated costs related to the platting of the property. (Section 30 of original PA)
3. Something Else.

Staff is supportive of the EDA recommendation to extend the Inspection Period 6 months as presented.

Alternatives:
1) Adopt Resolution #20-179 Approving the Third Amendment to Purchase Agreement as recommended by the EDA "as-presented"
2) Adopt Resolution #20-179 Approving with modifications to Third Amendment to Purchase Agreement 
3) Something Else

This action is being covered under Staff duties.

Motion to adopt Resolution #20-179 Approving the Third Amendment to Development Agreement with Ramsey Hotel Group LLC (as recommended by the EDA , as presented).

Motion to adopt Resolution #20-179 Approving the Third Amendment to Development Agreement with Ramsey Hotel Group LLC (as recommended by EDA); subject to City Attorney approval.