Discuss COR Strategy

The COR (previously known as Ramsey Town Center) was purchased by the City HRA in June of 2009.  Attached is an exhibit prepared by Landform, the Development Manager at the time, outlining how the City had three development "exit" points in the process.  The first exit point was envisioned to be approximately January 2010, where at that time the project would have been re-visioned, a new concept design developed, and the property sold to a large developer.  The second exit point was to occur in mid-2011, where at that time it was envisioned "anchor" deals would have been completed and project "entitlements" would have been done (i.e., city and other agency approvals).  The third exit point was toward the end of 2012 , where at that time it was envisioned the anchor stores would be complete, infrastructure in place, and lots would be sold to small users.

Also attached are the charts showing the proposed costs and revenue projections for the COR tax increment financing district.  These exhibits identify some of the key obligations of this development including roads, utilities, and public parking ramps.

None.

While significant progress was made with the development in several ways, it is safe to say that land sales have been well below what was originally anticipated.  The City/HRA have done a number of things to enhance value such as making investments to the road system, adding onto the parking ramp, establishing a new name/brand, signage, creating a tax increment district, platting, zoning and design work.  

The construction of the rail station has spurred interest, particularly in residential development.  When the funding for the Armstrong interchange project is announced, it is anticipated that commercial interest will greatly increase.

Strategies:

1)  Continue as is:   This strategy relies upon the fact that the City is hiring an economic development manager, who, along with existing staff could begin marketing this property in a systematic fashion.  Evidence indicates that construction activity is starting to increase and the "rooftops" under construction now may drive additional development.  If the City is successful in obtaining the Armstrong interchange funding, interest in surrounding land will be high.  The rail station impact will also continue to build.  A streamlined internal development process also will make it easier to do business in Ramsey.  Developers will be required to do individual planning and engineering for each site as part of the sale.

2)  Broker arrangements:  This strategy relies on the land professionals that are in the business to sell land.  Typically, they would charge 7% of the land value at closing.  The advantage of this approach is that the agent would take care of all the marketing and would get commission at the sale.  Land could be sold to either developers and or for speculation, but would likely end up back on the tax roles once sold (unless sold to a tax exempt entity).  The HRA can reasonably control who the land is sold to under this strategy, but land could be resold unless the City insisted on development agreements.  This strategy could also be implemented on a partial basis.  That is, portions of the land in the COR could be listed with one or more brokers, and the HRA would retain key parcels.  Please see the attached map of the different COR subdistrict areas.

3)  Requests for Proposals:  Under this strategy the City would solicit requests for proposals for all, or a large piece of the COR, to go to sale to a developer.  The City would judge the strength of the proposal based upon the developer's track record, reputation, financial wherewithal, and fit with the community.  This has the advantage of shifting much of the development activity, and the development risk/reward to a private entity.  Depending on the structure of the land take-down, much of the land could go immediately back to the tax roll.

Staff would recommend continuing "as is"  for the near term until new staffing takes effect, and the Armstrong intersection project direction is determined.  It is recommended that the HRA  go through a process with the new staff of identifying a large piece (or pieces) of property that can be listed with a broker and/or solicited for proposals by year-end.

Not applicable.

Direct staff to pursue the staff recommended strategy or another strategy based upon discussion.