Purpose:  The purpose of this case is to discuss with Council Harvest Estate's request for an extension to their Development Agreement (Phase 1) and an extension to their Purchase Agreement for Lot 25, Block 1, Harvest Estates (Phase 2).

Background:

 

The Developer agreed to install an interim cul-de-sac where the current public road terminates near the former Police Department building in the event Phase 2 does not commence by June of 2016. The City secured a financial guarantee as a performance guarantee that the Developer would perform on this obligation.

 

The Developer is not anticipating construction of Phase 2 prior to the current deadline and is requesting a one-year extension as outlined in the attached materials. Phase 1 required improvements are substantially complete. Only final lift of asphalt and ancillary punch list items remain. The financial guarantee was reduced to reflect completed requirements, but sufficient amount has been retained to complete final items.

 

Please note the previous case on this agenda related to the demolition of the former municipal center buildings. The demolition of these buildings will likely result in the need to remove the parking lot that is being used as the current interim cul-de-sac, and will need to be replaced upon completion of demolition. This does add a layer of complication in timing of that project and the extension. Nonetheless, Staff feels it is appropriate to grant the extension, and utilize the Developer's financial guarantee for physical improvements or reimbursement of reconstruction of the interim cul-de-sac in the future if necessary.  In addition, staff will explore an alternative in the demolition contract to keep a portion of the existing parking lot in-place to serve as the interim cul-de-sac,  

 

Alternatives:

 

 

The Purchase Agreement as it relates to Phase 2 calls for closing within 30 days of notification from the City to G S Land, LLC of the completion of the demolition of the former municipal center. The timing of this project is outlined in the previous case on this agenda. The Developer has requested to be able to delay closing until 2017 to reflect current market conditions. Phase 1 still has approximately thirty (30) vacant, available lots for construction.

 

Staff is supportive of the request if the Developer provides compensation in exchange for the request in change in terms of the contract. Staff recommends $15,000 in earnest money, $5,000 of which immediately becomes non-refundable. The Buyer/Developer objects to this recommendation.

 

Alternatives

 

All costs associated with processing the request for extension to the Development Agreement are the responsibility of the Developer.

Staff recommends approving the request for extension based on the recommended term sheet attached (including establishment of new real estate escrow).

Motion to adopt Resolution #16-02-042 granting request for extension to Purchase Agreement and Development Agreement, both by and between the City and G S Land, LLC.