Approve Fourth Amendment to the Real Estate Contract Between the Ramsey HRA and McDonald's USA, LLC.

The Council has granted two previous extension of the McDonald's purchase agreement to extend the closing date, originally anticipated for July 2013.  The original request was for a six month extension; however, a 90-day and a 60-day extension were granted with the first and second amendments respectively.   A most recent extension on October 8, extended the contract 60 days,  to December 9.

Due to the fact that some open items remain prior to proceeding to close on the property, McDonald's has requested a 60-day extension to February 12, 2014.

The original Real Estate Contract between the HRA and McDonald's USA, LLC as well as the previous Second Amendment to the Contract are attached for Council information. 
 

Staff and legal council are of the opinion that all outstanding issues have been completed, however, McDonald's is given sole descretion under the contract to determine whether contingincies have been met.  Staff has asked McDonald's to waive all contingencies at this time and proceed to closing.
  
The HRA has the option to not extend the contract which would require McDonald's to either cancel the contract, or waive all contingencies and close within 14 days.  Given that McDonald's may not be able to waive all contingencies (and would therefore cancel the agreement) staff would support some extension.  A longer extension is not recommended as it would extend the process unnecessarily.
 
 

Not applicable.

It is recommended that the HRA approve the Fourth Amendment to the Real Estate Contract Between the Ramsey HRA and McDonald's USA, LLC with an extension of the contingency period to February 12, 2014, subject to the earnest money deposit of $5,000 becoming non-refunable and an additional earnest money check in the same amount being deposited.

Extending the contingency period will allow the City to proceed to closing with all contingencies removed.  Not approving the extension would potentially allow the City or McDonald's to cancel the contract.  Staff has worked with McDonald's in good faith to remove all contingencies to closing.  In our opinion all contingencies have been removed, but, under the contract McDonald's has sole discretion to determine whether contingencies have been met.  McDonald's has asked for additional time to review all contingencies, but staff would recommend that the current earnest money become non-refundable if is to get an extension.
 

Approve Fourth Amendment to the Real Estate Contract Between the Ramsey HRA and McDonald's USA, LLC with an extension of the contingency period to February 12, 2014, subject to earnest money deposit of $5,000 becoming non-refunable and an additional earnest money check in the same amount being deposited, plus the review and approval of the City Attorney.