6.2.
HRA Special Session
- Meeting Date:
- 01/18/2011
- By:
- Heidi Nelson, Administrative Services
Title:
Consider TOTI Holdings LLC - Suite Living Purchase Agreement Amendment
Background:
As the HRA will recall, a purchase agreeement for TOTI Holdings LLC - Suite Living was approved and executed in September 2010. Within the terms of the purchase agreement, TOTI had the right to extend its due diligence date. In addition, the City was required to satisfy certain contingencies with regard to the title for the land and the creation of the special services district (SSD). TOTI Holdings LLC has exercised its right to extend its due diligence period froom December 31, 2011 to March 31, 2011.
The terms of the amendment to the purchase agreement, in addition to recognizing TOTI’s extension of the contingencies set forth in Section 15(a) and 15(e), confirms that the contingencies set forth in Sections 15(b), 15(c) and 15(d) of the original purchase agreeement (attached) have either been satisfied or waived.
Addtionally, in section 15(b), the HRA agrees in the amendment that it will not subject the Property either to the terms of the existing Master Declaration or to any replacement Master Declaration prior to closing without TOTI’s consent. The HRA intends to seek termination of the existing Master Declaration (which encumbers certain other properties in the COR but does not encumber the subject Property) and to pursue and Special Service District rather than a replacement Master Declaration.
With respect to the Special Service District, the City is preparing the draft Ordinance, but the HRA asks TOTI to waive this contingency based on the HRA’s representation and warranty that, regardless of the form of the Ordinance the City ultimately adopts, the Ordinance will not subject the Property to any fees or charges unless TOTI either (1) re-zones the Property to a commercial or industrial zoning classification or (2) uses the Property for a commercial or industrial use that causes the Anoka County assessor to classify the property as commercial industrial property under Minnesota Statutes Section 273.13. The HRA is able to make this representation and warranty because under Minnesota Statutes Section 428A.02, a special service district ordinance may only impose charges upon commercial industrial properties. Once TOTI has reviewed the SSD oridinance, it can waive that contingency.
One addtional item is with regard to the size of the parcel and the land sale price; the size of the parcel reduced slightly through the platting process that was completed following the September 2010 approval of the purchase agreement. The purchase price was reduced from $1,542,600 to $1,411,165. The DM Fee associated with this transaction will be amended to reflect the revised sale price.
The original purchase agreement and the proposed amendment are attached for HRA review.
Notification:
TOTI Holdings LLC provided proper notice to the HRA of their extention of the due diligence period.
Recommendation:
Staff recommends that the HRA review the revised purchase agreeement and approve the revised purchase agreement.
Funding Source:
Legal for this project is paid for by the HRA budget for legal, offset by land sale revenue at time of closing as sellers expense.
Council Action:
HRA Action: Approve revised purchase agreement with TOTI Holdings LLC.
Fiscal Impact
- Budgeted Y/N:
- Y
- Budgeted Year:
- 2011
- Fund:
- HRA
Funding:
2010 and 2011 HRA budget for legal.
Attachments
Form Review
- Form Started By:
- hnelson
- Started On:
- 01/13/2011 12:37 PM
- Final Approval Date:
- 01/13/2011