4.5.
Economic Development Authority (EDA)
- Meeting Date:
- 03/09/2017
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Title:
Stone Brook Children's Academy & Childcare Center Purchase Agreement
Purpose/Background:
Purpose
Consider the attached purchase agreement (PA) with Stone Brook Academy for 1-acre of land located near the center of The COR for a children's academy and childcare center.
Consider the attached purchase agreement (PA) with Stone Brook Academy for 1-acre of land located near the center of The COR for a children's academy and childcare center.
Review
This case was reviewed by the EDA on 12/08/16 and 01/12/17. This case was reviewed by the Planning Commission on 01/05/17 and 02/02/17. This case was reviewed by the Council on 01/24/17 and 02/14/17. All parties are generally very supportive of the use/ proposed project. However, the site location has been the focal point of conversations to-date.
The EDA is in general support of Stone Brook's proposed site location, Site #1 (5-1 vote on 01/12/17). The Planning Commission is in general support of Stone Brook's proposed site location, Site #1 (5-1 vote on 02/02/17). The Council is in general support of Stone Brook's proposed site location, Site #1 (7-0 vote on 02/14/17).
It appears all boards/ commissions have indicated support for a north-to-south road connection (Veteran's to Sunwood). It appears there is not consensus on whether that road connection be a private drive or a public road. Additionally, it appears there is general support for the attached master plan "B" which shows an east-to-west internal connection through the proposed Stone Brook site. Please see attached Site #1 Feedback Log for details.
City Review process
This case is being addressed in several separate steps:
Step 1: Site Location/ Site Concept
The purpose of this case is to provide direction from a master developer perspective (site location, concept project layout).
Step 2: Real Estate transaction (current case)
The purpose of this step will be to consider a formal purchase agreement (i.e. deal terms).
Step 3: Entitlement
The purpose of this step is to review Plat and Site Plan applications (i.e. site plan/ zoning/ land use regulations).
The purpose of this case is to provide direction from a master developer perspective (site location, concept project layout).
Step 2: Real Estate transaction (current case)
The purpose of this step will be to consider a formal purchase agreement (i.e. deal terms).
Step 3: Entitlement
The purpose of this step is to review Plat and Site Plan applications (i.e. site plan/ zoning/ land use regulations).
Notification:
NA
Observations/Alternatives:
The attached purchase agreement was modeled after the City's template purchase agreement and policy for selling city owned land. Staff believes the attached purchase agreement doesn't have any major red flags/ issues. Below is a summary of major deal points (often times called a term sheet). The attached agreement was drafted by the City Attorney.
(A) Purchase Price: $3.30 psf, $143,748
CBRE Asking Price: $5.00 psf, $217,800
CBRE Deal Range High: $4.50 psf, $196,020
CBRE Deal Range Low: $2.25 psf, $98,010
City Purchase Price: $2.44 psf, $106,286
Stone Brook Offer #1: $0 psf, $0
Staff Counter #1: $4.00 psf, $174,240
Stone Brook Offer #2: $2.50 psf, $108,900
EDA Counter #1: $3.50 psf, $152,460
Stone Brook Offer #3: $3.00 psf, $130,680
Closing 14 days after Notice-to-Proceed.
(A) Purchase Price: $3.30 psf, $143,748
CBRE Asking Price: $5.00 psf, $217,800
CBRE Deal Range High: $4.50 psf, $196,020
CBRE Deal Range Low: $2.25 psf, $98,010
City Purchase Price: $2.44 psf, $106,286
Stone Brook Offer #1: $0 psf, $0
Staff Counter #1: $4.00 psf, $174,240
Stone Brook Offer #2: $2.50 psf, $108,900
EDA Counter #1: $3.50 psf, $152,460
Stone Brook Offer #3: $3.00 psf, $130,680
EDA Counter #2: $3.30 psf, $143,748
(B) Earnest Money: $7,500, non-refundable after Notice-to-Proceed.
(C) Term: Inspection Period 08/01/2017.
Closing 14 days after Notice-to-Proceed.
Can extend for two 60-day terms via non-refundable $2,500 earnest money deposits
(D) Construction Deadline: 09/01/2018, includes right-of-re-entry agreement clause/ or fine.
(E) Platting/ Development Agreement: must obtain plat, development agreement, site plan, and approved visual renderings before closing on purchase.
(F) Road Connection: if public 80:20 split, if private 50:50 split. The agreement allows for this item to be resolved after the PA is signed (provides for two options). The attached Site #1 Log discusses this item (see staff section).
Public Road Connection: $285K estimate (see attached). The informal policy historically implemented in The COR for cost-sharing public roads is a 60-40 split (60% city). It should be noted, public roads are typically designed at a much higher level than private drives (width, load capacity, landscaping, utilities, etc.). Stone Brook is proposing that the 60/40 cost share be used on this public road project. Stone Brook has indicated that the 40% "developer" share should be split between Stone Brook and the other property that will have direct access of Sunwood Drive. Therefore, effectively, Stone Brook is proposing a 20% share of costs. This item will be resolved
Private Road Connection: $150-$225K estimate (verbal). Staff has ordered a second WSB Feasibility Report for a private drive (pending).
Funding Source:
NA
Recommendation:
Staff is generally comfortable with the terms and conditions laid out in the attached purchase agreement. They appear to meet our land sale policies. Staff does not have a need to go into closed session for this case--as Stone Brook has agreed to the EDA's last counter offer. This project appears to have several benefits for the City, and The COR:
(1) Generate trips to The COR, which will help drive retail interest--140 students, 100+ trips in the AM, and 100+ trips in the PM. Also, estimated 20 Stone Brook employees will patronize businesses in The COR. Stone Brook believes they are a destination user.
(2) Provide a high-end facility, with good architecture, in The COR. Building will be pushed up against Sunwood. Will be a transition from apartments to traditional retail.
(3) Provide high-end childcare and academic services for Ramsey Residents--an amenity for the community.
(4) Will create about 20 jobs, and will generate about $45K in total property taxes per year. Will contribute to the City's COR TIF District (which is needed for many other COR development related obligations).
(5) Will generate $143,748 in land proceeds (gross), and will continue important "positive-real-estate-momentum" for The COR. Will result in an estimated $60K in development fees (park, trails, water, sewer, storm).
(6) Will establish a north-south connection mid-block between Sunwood and Veterans.
(7) Project meets COR Master Plan and City Zoning Standards--and generally appears to meet the vision of The COR (there has been mixed discussion and opinions on this item).
(2) Provide a high-end facility, with good architecture, in The COR. Building will be pushed up against Sunwood. Will be a transition from apartments to traditional retail.
(3) Provide high-end childcare and academic services for Ramsey Residents--an amenity for the community.
(4) Will create about 20 jobs, and will generate about $45K in total property taxes per year. Will contribute to the City's COR TIF District (which is needed for many other COR development related obligations).
(5) Will generate $143,748 in land proceeds (gross), and will continue important "positive-real-estate-momentum" for The COR. Will result in an estimated $60K in development fees (park, trails, water, sewer, storm).
(6) Will establish a north-south connection mid-block between Sunwood and Veterans.
(7) Project meets COR Master Plan and City Zoning Standards--and generally appears to meet the vision of The COR (there has been mixed discussion and opinions on this item).
Action:
Motion to recommend the City Council:
Approve the attached purchase agreement (PA) with Stone Brook Academy for 1-acre of land located near the center of The COR for a children's academy and childcare center.
Sidebar: any feedback on the discussion for a required north-to-south connection between Sunwood and Veterans (i.e. Yolite) would be helpful for the City Council--i.e. public versus private. Also, similar feedback on the proposed east-to-west internal site connection would be appreciated (master plan concept "B").
Approve the attached purchase agreement (PA) with Stone Brook Academy for 1-acre of land located near the center of The COR for a children's academy and childcare center.
Sidebar: any feedback on the discussion for a required north-to-south connection between Sunwood and Veterans (i.e. Yolite) would be helpful for the City Council--i.e. public versus private. Also, similar feedback on the proposed east-to-west internal site connection would be appreciated (master plan concept "B").
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Mark Riverblood | Mark Riverblood | 02/21/2017 10:23 AM |
| Brian Hagen | Tim Gladhill | 03/02/2017 09:37 AM |
| Bruce Westby | Kathy Schmitz | 03/06/2017 03:44 PM |
| Kurt Ulrich | Kathy Schmitz | 03/06/2017 03:45 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 02/20/2017 10:27 AM
- Final Approval Date:
- 03/06/2017