Consider First Amendment to Purchase Agreement with PSD LLC dated August 06, 2014

The Ramsey HRA entered into a Purchase Agreement (PA) with PSD, LLC for 13.97 acres of Ramsey HRA owned land located within The COR on August 06, 2014.  The proposed closing date for this agreement was no later than September 15, 2014 (also referred to as the termination date within the PA).  Attached to this case is a copy of the original PA.

On September 11 Staff received a formal request from PSD, LLC to extend the September 15 closing date to December 25, 2014.  Said request is attached to this case.  PSD, LLC is requesting an extension to this PA to provide sufficient time for the City to amend COR-1 Zoning Code; which would allow PSD, LLC to construct their proposed project (which the Council reviewed in CONCEPT on September 09).

The existing PA with PSD, LLC does contain a contingency provision that requires the City to work in “good-faith” to attain government approvals before closing.  It is Staff’s belief, PSD LLC’s attached request fits within said provision.  Lastly, staff would like to note, government approvals are predicated on receiving full and complete applications and plans from PSD LLC.

Notification is not required for this request.

ALTERNATIVES

1. Approve proposed PA amendment (staff recommendation)
By accepting the proposed PA amendment, the City would be extending an existing PA agreement with PSD, LLC through December 29, 2014.  The proposed amendment does not alter/change any other the terms and conditions included in the PA executed by the HRA on August 06.  As the HRA may recall, the existing PA includes no government subsidies and meets the adopted City owned land pricing strategy reviewed in the spring of 2014 by the City Council.  It is Staff's perspective, the request made by PSD, LLC is reasonable, and meets the intent of the original PA.  Attached to this case is the proposed timeline for considering an amendment to the City's COR-1 Zoning District.

2. Deny proposed PA amendment
By not approving the proposed PA amendment, the HRA would be terminating the existing PA with PSD, LLC indefinitely.  Staff has not identified a reason the HRA should consider denying the proposed amendment.  The existing PA signed by the City in August included a six week due-diligence period for PSD, LLC. Considering standard practice, projects of similar size typically include a 3-12 month due-diligence period.  Unless a hardship can be identified by the HRA as a result of approving the proposed amendment, not approving said amendment may negatively affect the HRA's relationship with PSD, LLC.  It should be noted, if the proposed agreement is terminated, the Staff would restart marketing the subject property with CBRE.

3. Amend and approve proposed PA amendment
The HRA may wish to tweak or adjust provisions included in the proposed amendment.  Staff would be happy to make adjustments as requested by the HRA.  PSD, LLC will be present at this meeting to discuss any proposed amendments.

The amendment is being handled as part of normal Staff duties.

Approve the proposed first Amendment to the Purchase Agreement between the Ramsey HRA and PSD LLC dated August 06, 2014.

Approve the proposed first Amendment to the Purchase Agreement between the Ramsey HRA and PSD LLC dated August 06, 2014.