Review Purchase Agreement for Sale of Outlot A, B and a portion of Lot 1 Block 1 of RTC 11th Addition (portions may be closed to the public)

The purpose of this case is to review, and potentially authorize execution of, a Purchase Agreement (PA) between the Ramsey HRA and PSD, LLC. CBRE provided Staff with a PA from PSD, LLC on July 10th. Staff began reviewing the PA through an internal development review team consisting of Community Development, Economic Development, Engineering, Administration and our Legal Counsel. Staff negotiated with PSD on various elements and is presenting the (attached) PA for the HRA's formal consideration. Following is a review of key elements of the PA:

• Location is identified in the attached "Subject Property" document
• Offer of $1,897,089.60 (for 608,533.2 square feet equating to $3.12 per square foot) in cash at closing with $50,000 earnest money at agreement execution
• Offer is consistent with pricing schedule approved by the City of Ramsey and Ramsey HRA; higher end of deal range pricing
• Closing on or before August 11^th of 2014; cash in hand at closing
• CBRE, the City and HRA's preferred broker, commission at 5% equates to $94,854.48
• This is a land sale transaction only; no assistance is being requested at this time (note: if assistance is requested at a future date, that request is presented to and decided upon by the Council at that time)
• PSD will be partnering with another private developer to develop these parcels; an apartment complex (up to 230 units over time) is slated for the parcel up against The Draw with the southern parcel product TBD (possibly hotel, office/retail, etc.)
• Tax estimate (estimated by Anoka County) for this vacant land owned by a taxable entity at: $75,300 annually
• Tax estimate (estimated by Anoka County) for this land once fully improved at: $510,200 annually
• Tax base generated by this proposed development falls under TIF 14, meaning the majority of generated taxes (roughly 90%) are dedicated back to the TIF 14 fund and the remainder (roughly 10%) are dedicated back to the City's General Fund
• Construction start is pending with a desired start in Fall 2014 or Spring 2015
• Road (between Outlot A and B) to be constructed by PSD to City of Ramsey specifications. This road will then be handed over to the City of Ramsey for maintenance, etc.
• Re-platting to be done by PSD to meet their specifications
• Zoning related items regarding parking structures/floor area ratio (density-- could drive need for parking structure) still need to be determined; PSD has indicated interest in structured parking as it relates to the master COR plan-- these items to be reviewed at time of site plan submittal

Please note that the HRA does have the authority to enter into closed session, per MN Statute 13D.05 Subd. 3, to discuss certain elements of the PA.

Alternative #1: Decline authorization to enter into a PA with PSD, LLC

Alternative #2: Approve authorization to enter into a PA with PSD, LLC with the following adjustments (if any)_____________________ with final review by City Attorney.

 

Staff recommends Alternative #2. Staff feels the PA is reasonable, the offer is reasonable, construction timeline is prompt and the products proposed will provide value to The City of Ramsey.

Motion to authorize entering into a PA with PSD, LLC with the following adjustments (if any)_____________________ with final review by City Attorney.