Consider Multiple Actions Related to the Sale and Redevelopment of the City's Former Municipal Center Site Located at 15153 Nowthen Boulevard:

1. Land Swap Agreement with Meadow Creek Builders, Inc.
2. First Amendment to Purchase Agreement with G S Land, LLC
3. Request for Use of Anoka County Housing and Redevelopment Authority Dollars to Assist with Redevelopment Costs

Purpose

The purpose of this case is to consider two (2) real estate agreements related to the redevelopment of the former municipal center and to consider a request to the Anoka County Housing and Redevelopment Authority to assist with the redevelopment costs for the site.

Background

The City is in the process of reviewing Harvest Estates, a 44-lot detached single-family development on the site of the former municipal center located at 15153 Nowthen Blvd NW. The site still currently operates as Fire Station No. 2. The site is currently owned by the City, and thus various real estate agreements are necessary. The purpose of this case is to approve various real estate agreements. This case does not provide regulatory approval of the subdivision request itself. That process is anticipated to be in front of the City Council on May 12 and May 26. Actions tonight will not give final approval to the actual redevelopment of the site.

Components of Request
 

1. Adopt an Agreement for Land Swap with Meadow Creek Builders, Inc.
2. Adopt First Amendment to Purchase Agreement with G S Land, LLC (assignee of N.I.K. Management, Inc.)
3. Consider Request for Funds to Anoka County Housing and Redevelopment Authority for Redevelopment Costs

Adopt Land Swap Agreement

The City currently owns the parcel generally known as 15240 Helium St NW and legally described as Lot 21, Block 1, MEADOW. This parcel is utilized as a secondary access for the current Fire Station No. 2. When Fire Station No. 2 is re-located, this secondary access is no longer needed.

Meadow Creek Builders, Inc. currently owns the property generally known as 15208 Krypton Ter NW and legally described as Lot 1, Block 1 and Outlot A, MEADOW. The City currently holds a temporary access easement over and across this lot for the primary access to the current Fire Station No. 2 as well as various utilities to serve the current building. The access is no longer needed when Fire Station No. 2 is relocated. The existing utilities would need to be relocated if the City is not to acquire the property. The existing utilities can be used in the construction of Harvest Estates if they remain in their current location.

The cost to re-configure the existing utilities the impact Lot 1, Block 1, MEADOW could be as high as approximately $50,000. Additionally, per City Council and Planning Commission direction, the City is also requesting a pedestrian trail connection that would impact Outlot A, MEADOW. Meadow Creek Builders has stated that they would request approximately $15,000 for the City to acquire a trail easement for this purpose. Finally, given the significant discussions regarding the status of the access for Harvest Estates to Nowthen Boulevard, this swap would provide flexibility in future discussions for safety, congestion, and mobility improvements to Nowthen Boulevard.

The assessed value of the City Parcel is $49,000. The current assessed value of the combined parcels owned by Meadow Creek Builders is $5,000. Staff believes the low assessed value of the Meadow Creek parcels is due to the existing encumbrances (driveway and utilities). The parcel was allowed to be subdivided as a buildable lot with the understanding that these encumbrances were to be removed, and is noted in the Development Agreement for MEADOW. It is anticipated that Lot 1, Block 1, MEADOW would have a similar assessed value once the encumbrances were removed per the previous agreement.

Given the factors above, the flexibility the swap provides in the future, and similar values, Staff recommends approval of the Land Swap Agreement. Additionally, Staff is concerned about re-configuring the utilities now with some uncertainty of future access to Nowthen Boulevard. Staff wants to avoid multiple re-configurations and disruptions to the utilities in this area.

Alternative #1: Adopt Land Swap Agreement as presented. This will allow the City to leave the utilities the current location and provides flexibility into the future to determine if a future access to Nowthen Boulevard is warranted. In addition, the only additional cost to the City is the construction of a sidewalk as well as curb and gutter for Lot 21. This would likely be an obligation of the City as seller regardless. This can also be incorporated into final plans of Harvest Estates.

Alternative #2: Amend the Land Swap Agreement. This could entail negotiating obligations or sale price. Staff does not believe this is necessary.

Alternative #3: Do Not Approve the Land Swap Agreement. This would obligate the City to cover the costs of utilities re-configuration and negotiate a trail easement estimated at $15,000. Additionally, if a future connection to Nowthen Boulevard were desired, this alternative would limit options, leaving only acquisition of the parcel to the south for a future connection.

Adopt First Amendment to Purchase Agreement with G S Land, LLC (assignee of N.I.K. Management, Inc.)

Exclusion of Parcel

The current Purchase Agreement with G S Land, LLC includes Lot 21, Block 1, MEADOW that is subject to the proposed Land Swap Agreement with Meadow Creek Builders, Inc. Lot 21 is being removed from the Purchase Agreement with G S Land, LLC. Both parties are in agreement with this provision and does not materially affect the terms of the remainder of the agreement.

Purchase Price

Upon survey of the site, actual parcel sizes are now known. Total lot size included in the Purchase Agreement has been determined to be 21.28 acres in size. G S Land, LLC is requesting a reduction of the total purchase price from $920,000 to $895,960 to reflect the true size of the lot as conveyed by Hedlund Engineering.

The remainder of the Agreement remains unchanged.

Alternative #1. Adopt the First Amendment as presented. The total offer price still reflect the price per acre found in the original Agreement. Staff finds it fair to adjust based on actual lot size.

Alternative #2. Negotiate the terms of the First Amendment. This would be based on discussion with the City Council.

Alternative #3. Do not adopt the First Amendment and require the original asking price of $920,000. Staff would still suggest retaining the provision to exclude Lot 21 to allow the Land Swap with Meadow Creek Builders to occur.

Request for Anoka County Housing and Redevelopment Authority (ACHRA) Funds to assist with Redevelopment Costs

Under the Purchase Agreement with G S Land, LLC, the City is responsible for demolition of the current Fire Station No. 2 (former municipal center campus). The end result will be the creation of a quality housing development, an increase in the City's taxable base, and the removal of existing buildings that have been determined no longer needed for public purpose upon completion of the new Fire Station No. 2.

The Anoka County HRA levies Ramsey residents. The original intent of levying Anoka County HRA taxes in Ramsey was to cover obligations of the Savanna Oaks Senior Housing Development at the intersection of Nowthen Boulevard and Dysprosium Street. A fund balance exists in this account that the City of Ramsey has access to for housing and economic development purposes. The demolition, site clean up, and utilities reconfiguration (in addition to the reconfiguration noted above) required to redevelop the site as proposed appear to be an eligible expense for these dollars. Details of the request are included in the attached narrative.

Alternative #1: Direct Staff to prepare a final application to Anoka County HRA for consideration by the City Council at a future date. This alternative would allow the City to maximize its return on investment on the sale of 15153 Nowthen Boulevard.

Alternative #2: Do not direct Staff to prepare a final application to Anoka County HRA for consideration by the City Council at a future date. This alternative would allow the City to reduce its return on investment on the sale of 15153 Nowthen Boulevard. Costs for redevelopment would need to come from the proceeds of the sale.

Funding sources for the three (3) requested actions this evening are outlined in the individual sections above.

Staff recommends approval of the attached agreements.

Motion to approve the following, subject to review by the City Attorney as to legal form:
 

1. Land Swap Agreement with Meadow Creek Builders, Inc.
2. First Amendment to Purchase Agreement with G S Land, LLC
3. Request for Use of Anoka County Housing and Redevelopment Authority Dollars to Assist with Redevelopment Costs