Approve Purchase Agreement for North Commons COR III  (portions may be closed to the public)

At the regular meeting of April 23, 2013, the HRA considered an offer to purchase residential lots within the COR III North Commons development.  

At the regular meeting of May 28, 2013, the HRA was presented with four options relating to the North Commons site.  Following discussion, the HRA approved pursuing Option 2 which would include the development of the four lots on the west side of the park only.  The four house pads were previously rough graded so the work to develop the four lots would simply require construction of water and sanitary sewer services, repairing the street where the services were connected to the main, constructing driveway aprons and sidewalks across all four lots, and constructing a storm sewer outlet for the wetland located within the park.

Two independent parties have presented offers to purchase all four lots.

The proposed park lots are fully graded and soils have been corrected on the building pads.  Due to the adjacency to the City Park these can be considered "premium lots" which will command a higher price than the smaller standard lots existing or proposed for other areas of this neighborhood.

The original pro-forma for this development showed the price range for the park lots from $50,000-$60,000.  The City had entertained purchase offers for the small non-park lots at the low end of their range, $35,000.

The City can either negotiate a sale with one of the two interested parties, or "go out to the market" with a broader distribution to all local builders to see what interest their might be at the mid to higher range of the projected sales.

A negotiated sale with one of the interested parties will give the City the quickest turn-around on these properties.  Waiting additional time to market the properties may result in a higher sales price, but might push any construction back to the next season.

The City could also list these properties at a fixed amount with a real estate agent.  The agent's fee would add an expense to this transaction.

Staff recommends that the City negotiate the sale of the lots with the interested buyers in order to expediate the sale of these properties and consider the original pro forma numbers as a starting point.  Both parties represent local builders, who have previously shown interest in the lots.  A second option is to open up with a direct solicitation to local builders. 

Improvements to the properties would be installed with internal borrowing and paid back with land proceeds.

Negotiate the sale of lots with interested parties.