Adopt Resolution # 23-102 Approving Second Amendment to Purchase Agreement and Right of Re-Entry Agreement for Part of Outlot C, Affinity at the COR; Case of COR Trust Bank
(Portions may be closed to the public)

The City Council may choose to go into closed session pursuant to Minnesota Statutes section 13D.05, subdivision 3(c)(3) to consider offers or counteroffers for the purchase or sale of real or personal property.  If the City Council chooses to enter into closed session, the statute and reason above needs to be referenced along with legal description (Part of Outlot C, Affinity at the COR) and the Anoka County Tax ID number 28-32-25-24-0017.

The purpose of this case is to consider extending the Inspection Period from April 30, 2023 to June 30, 2023.  The Developer has submitted a site plan application that will be reviewed by the Planning Commission on May 25, 2023.  The developer is not comfortable issuing a Notice to Proceed prior to the site plan being recommended by the Planning Commission and ultimately adopted by the City Council.  As such, the request to extend the Inspection Period from April 30 to June 30, 2023 has been submitted by the Developer.  City Staff and the City Attorney have drafted a Second Amendment to Purchase Agreement to accomplish this goal.  The Developer has reviewed the Second Amendment and has signed it showing its commitment to move forward in this process.  The Developer has stated that the City can continue to hold the $10,000 in Earnest Money in the interim until the Second Amendment is approved.  COR Trust is on track to break ground this year if site plan approval is granted.

More Background
The EDA met August 11, 2022 and adopted a motion to City Council recommending approval of a purchase agreement with COR Trust Bank to build in the COR.  The City Council of Ramsey approved the Purchase Agreement and form of Right of Re-Entry Agreement through adoption of Resolution #22-186.   Staff previously reviewed the proposed layout and has requested more detailed information relating to building size, materials, access points and some preliminary building elevations.  Staff has also conveyed the requirements of the COR and building height along Sunwood Drive to the Developer.  The site has been reconfigured based on Staff comments. The buyer had some problems with its civil engineer/architect relating to licensing in Minnesota that set back this project a few months.   The City Council approved the First Amendment to Purchase Agreement extending the Inspection Period one month to April 30, 2023.  However, this was not enough time to get a complete site plan submitted in a timely manner and more time is ultimately needed.  

The Planning Commission will review the formal site plan on May 25, 2023 to ensure the layout is consistent with COR zoning and code.  

Notification is not required.

Observations:  The proposed site will be  +/- 1.24 acres upon completion of the Final Plat which is slightly smaller than originally envisioned.  The new proposed legal description is Lot 1, Block 1, Affinity at the COR 2nd Addition.   Based on a proposed building size of 5,020 SF, staff believes that the proposed site acreage better accommodates the development size.  The purchase price would be adjusted to $323,346 ($6.00 / SF) if the acreage in the preliminary plat does not change. This price per/SF is within the approved "deal range".   A copy of the site plan submitted to the Planning Commission is attached but could change slightly.  This was a city generated lead for a city listed parcel so CBRE and JB Vang will each receive 3% commission.  

The following items are worth highlighting:
 

Earnest Money	$10,000, Nonrefundable after a Notice to Proceed has been given by the Buyer.
Inspection Period	271 days from Effective Date (Date City Council Approves) (city requires plat/ site plan approval before sale). (Extended from April 30, 2023 to June 30, 2023)
Closing	Within 30 days of Notice to Proceed.
Extensions	Developer will deposit $10,000 in escrow for each 60 day extension (2 extensions allowed) Once extensions are made the money becomes non-refundable.
Performance	City to require construction of a minimum 4,500 SF building and obtain a Certificate of Occupancy 16 months after Closing.  If this is not done, the City may exercise the Right of Re-Entry Agreement.

Alternatives:

1. Adopt Resolution #23-102 Approving Second Amendment to Purchase Agreement and Right of Re-Entry Agreement as presented. (Staff recommendation)
2. Adopt Resolution #23-102 Approving Second Amendment to Purchase Agreement and Right of Re-Entry Agreement with changes.
3. No Action (PA would terminate and Property would be put back on the market)
4. Something else.

This case is being handled as part of normal Staff duties.

Staff recommends that the City Council to approve Second Amendment to Purchase Agreement and Right of Re-Entry Agreement for Part of Outlot C, Affinity at the COR (as presented); subject to City Attorney review.

 

Motion to Adopt Resolution #23-102 Approving Second Amendment to Purchase Agreement and Right of Re-Entry Agreement for Part of Outlot C, Affinity at the COR as presented; subject to City Attorney review