Landform Professional Services, LLC's Contract with Ramsey HRA

The current Development Management (DM) contract for The COR at Ramsey will be in effect until March 31, 2013.  The current contract has been in effect for two years and preceded the original contract of April 2010, and preliminary work that was done by Landform starting in 2009.

The contract provides for a variety of development management services relative to the COR in exchange for compensation in the form of "Administrative Compensation," "Incentive Compensation," and Additional Compensation."  

Recently the City received two documents (attached) asserting that Landform should not be compensated for services that Landform has provided to the HRA because its services performed under the contract constitute serving as a real estate broker or agent.

The Landform Attorney has provided a response asserting that both Landform and the City HRA have not "abridged any law of this state." (See attached letter: Shainess 1/31/13)

The City HRA Attorney has reviewed all relative documents and is preparing a memo for Tuesday evening.  Unfortunately, the HRA Attorney experienced the death of an immediate family member, and consequently the memo is expected early next week.   No immediate action is required at this meeting.

This meeting is to discuss alternatives available to the HRA in regard to the Landform contract for the balance of the remaining term. 

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It is recommended that the HRA review and discuss the Landform response and the HRA Attorney's response, and alternative actions available.

The Professional Services contract with Landform was originally drafted with the assistance of the City Attorney  Bill Goodrich.  The review of the current issue is being done by HRA Attorney Tom Bray.  An estimate of ($1,100 to $1,760) was received from a third law firm, used extensively by the League of Minnesota Cities, to provide an "outside" legal opinion.  This would be a reasonable amount to confirm our legal direction with an attorney that has a more objective position in the matter.

In regard to the Landform contract, it is recommended that the HRA not renew the contract, but proceed with alternative of hiring an Economic Development Manager as directed by Council.  Staff would work with the development manager to ensure a smooth transition of documents and contacts.  An hourly services agreement should be negotiated as part of this transition for any necessary future work that may need to be done following the contract.  The Development Manager's contract provides that incentive fees are to be paid for any HRA Contracts with third parties, for a period of fifteen month following termination.

It is recommended that the Council proceed to the March 31 termination date of the Landform contract and that staff be directed to negotiate with Landform any outstanding issues.  Staff supports an outside legal review as indicated.

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It is recommended that the Council proceed to the March 31 termination date of the Landform contract and direct staff to negotiate with Landform any outstanding issues prior to that date, and direct staff to obtain an outside legal review of the contract in an amount not to exceed $2,000.