Consider Alternate Platting Scenario - COR TWO

In June of 2012 the Planning Commission approved the sketch plan for all proposed platting in The COR.  This included the proposed plat of COR TWO on the western edge of the project.

On August 2nd, the Planning Commission held a public hearing, and recommended approval of the preliminary and final plats for COR TWO.

On August 15, 2012, the City Council approved the plat, and an ordinance related to the vacation of easements and rights-of-way was introduced.

On August 28th, 2012, The ordinance related to the vacation of easements and rights-of-way were adopted.

The plat of COR TWO was completed and ready for recording at the end of 2012.  Parties to the plat included the HRA and Sophia-Ramsey, LLC. Sophia-Ramsey, LLC are the owners of Lots 1 and 2 in Ramsey Town Center 3rd Addition, commonly known as the Coborn's anchored retail area.  The timing of recording of the plat is significant because state law requires all parcels included in the plat to be paid current on property taxes.  If this occurs on December 31st, this consists of a single day of property tax.  On January 1, the taxes due to record the plat would be a full year, or over $300,000 on Sophia Ramsey's two lots.

In 2012, Sophia Ramsey had previously agreed to record the plat, and the HRA Development Team negotiated all agreements and easements accordingly.  These easements included, but are not limited to, shared access easements, trail easements, and drainage and utility easements. In December of 2012, Sophia Ramsey's mortgage was sold. The new mortgage holder had not assigned the account, and accordingly was not able to consent to the plat.  As a result, the plat could not be recorded before year-end. While Sophia Ramsey still wants to be part of the plat, they have stated they are no longer able to participate in the plat because of the requirement to pay their taxes in full for the 2013 fiscal year. It is anticipated that Sophia Ramsey will desire to complete the process near the end of 2013.

Separately, in order to facilitate the site plans for McDonalds and Super America, the COR TWO Plat (or version thereof) must be recorded. If modifications are required to exclude areas of the Plat previously approved by the City Council, thus necessitating the creation of additional parcels or modification to the configuration of lot lines, the revised Plat will need to be approved by the City Council. Based on initial review of the concept proposed, it is recommended that City Council action will be necessary.

In addition, the City was awarded a Local Road Improvement Project (LRIP) Grant to construct the re-aligned Sunwood Drive. In order to complete the terms of the grant award, the City Council must certify that it holds fee-title ownership for the roadway. Currently, the HRA holds fee-title ownership, with an appropriate legal document provided that allowed construction to commence. The Plat of COR TWO was the proposed mechanism to convey fee-title ownership to the City. However, it should be noted that there are other viable options to address the grant award. These options include, but are not limited to, conveying a permanent road easement via quit claim deed or the recording a right-of-way plat. A right-of-way plat would dedicate the necessary right-of-way for Sunwood Drive, but would not satisfy certain terms of purchase agreements with the HRA, nor provide the necessary buildable parcels necessary to facilitate the projects referenced above. Due to timing, Staff has not been able to discuss costs associated with these options.

Given the situation with Sophia Ramsey, an alternative platting scenario is being proposed and this case seeks the HRA's direction as to how they would like to proceed.  The new scenario would require a redraft of the plat, and modifications to the existing easements and real estate documents. The cost for this effort is estimated at approximately $10,000 in legal, drafting, and reproduction costs. These costs could be recovered through the sale of the remnant parcels to Sophia Ramsey. It is noted that this expense has not currently been budgeted within the HRA budget. Staff will be prepared to discuss interim funding options at the HRA meeting, though is not providing a recommendation at this time.

The attached sketch outlines the proposed modification to the plat, and the remnant parcels created (Outlots B and C).

Staff notes, as clarification for the requested action, that the request this evening is for authorization to prepare revised documents. However, it is understood that this is not giving City approval to the form of any of the documents referenced. Although the proposal has been discussed with the City's Planning and Engineering Divisions, there has not been any formal approval or recommendation given.  Staff approval requires being able to review the proposed lot line configuration in more detail. It will also be necessary to work with the City Attorney to revise the right-of-way vacation for the former Sunwood Drive segment as it relates to future lot line configuration. Staff requests that tonight's action be made contingent on a detailed review of the sketch to ensure there are not any major barriers prior to preparing the revised plat.

It is recommended that the HRA proceed with the modification to the plat of COR TWO, and revise documents necessary to record the plat, contingent upon the HRA receiving adequate written agreement or cash escrow from Sophia-Ramsey to cover the costs incurred to the HRA as noted above, or securing some other form of guarantee to ensure the adequate repayment to the HRA.

The development team recommends the HRA propose the sale of the remnant parcels shown as Outlots B and C to Sophia Ramsey, LLC with the condition that they re-plat the parcels before December 31, 2013.

Upon successful acquisition of the parcels, the HRA would grant the access easement over the HRA lots as shown in the current documents.

Funding for preparation of the revised plat and associated documents has been proposed as proceeds of Land Sales - Sunwood Retail Area. Staff notes that it will verify the existence of current funding, to be paid back when appropriate sale proceeds is available.

Motion to enter into record a Request for Work Order from Landform Professional Services in the amount of $10,000 to support the request for additional services noted in the Staff Report.

-AND-

Motion to authorize the Executive Director to execute a work order with Landform Professional Services in the amount not to exceed $10,000 and to direct the development team to proceed with the modification to the plat of COR TWO and revise documents necessary to record the plat.

- Contingent upon-

• The HRA identifying the funding source necessary currently to proceed with the process;
• The City receiving a detailed proposal from Landform for the work to be performed;
• The Executive Director receiving an executed agreement or cash escrow from Sophia-Ramsey, LLC to repay the costs incurred by the HRA to revise the Plat and associated documents, or other form of security to ensure the ultimate funding for this process;
• Analysis by the City's Planning and Engineering Division supporting the viability of the attached sketch;
• Subject to review by the City Attorney as to legal form.