7.3.
CC Regular Session
- Meeting Date:
- 03/14/2017
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title:
Stone Brook Children's Academy & Childcare Center Purchase Agreement [Portions May be Closed to the Public]
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.
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).
Review Notes
This case was reviewed by the EDA on 12/08/16, 01/12/17, and 03/09/17. This case was reviewed by the Planning Commission on 01/05/17, 02/02/17, and 03/02/17. This case was reviewed by the Council on 01/24/17, 02/14/17, and 03/14/17 (this case). All parties are generally very supportive of the use/ proposed project.
Originally, site location had been the focal point of conversations RE this project. In February, staff received support from the EDA, Planning Commission, and Council to move forward with a purchase agreement for Site #1. Please see attached Site Location log for details.
Now, the focal point of discussion RE this case is the attached purchase agreement. In March, both the EDA and Planning Commission provided general direction to move forward with the attached purchase agreement.
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: $225-$275K estimate (verbal). Staff has ordered a second WSB Feasibility Report for a private drive (pending).
Funding Source:
NA
Recommendation:
Staff Comments
Staff is generally comfortable with the terms and conditions laid out in the attached purchase agreement. They appear to meet our land sale policies/ fit within the CBRE adopted "deal ranges"/ and meet the intent of our template purchase agreement. 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 on price. This project appears to have several benefits for the City, and The COR:
Staff is generally comfortable with the terms and conditions laid out in the attached purchase agreement. They appear to meet our land sale policies/ fit within the CBRE adopted "deal ranges"/ and meet the intent of our template purchase agreement. 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 on price. 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).
EDA Purchase Agreement Review
- EDA passed a 4-0 motion to recommend the Council adopt the motion outlined in the "Action" section of this case on 03/09/17. The EDA had very little discussion on this case on 03/09--as the EDA didn't feel discussion was needed. Little has changed with the case, from the perspective of the EDA (i.e. the land transaction), since it was introduced. The EDA recommended moving forward with the attached PA on Site #1 in January of 2017. The EDA maintains their position outlined in previous cases, in the attached Site #1 Log, and outlined above by staff.
- Based on previous EDA discussion--the EDA remains open to either a private drive or public road north-to-south connection for this project. The EDA remains generally supportive of an approach that incorporates this 1-acre project into the larger master site plan for the block (i.e. that could include a east-to-west internal connection).
Planning Commission Purchase Agreement Review
- The Planning Commission was generally in support of the attached PA (1 member remains opposed). The Planning Commission did not discuss the PA in great detail. The Planning Commission did focus on reviewing the proposed preliminary site layout concept. Below is preliminary feedback provided by the Planning Commission.
- The Planning Commission believes the proposed north-south road connection needs to be made. The Planning Commission is open to either a private drive or a public road. The Planning Commission's preliminary feedback was to lean towards a public road (rather than private). The Planning Commission believed a public road provides a better, and more "public" road and pedestrian connection on this block--which are more welcoming, and fit the vision of The COR. The Planning Commission had preliminary concerns about maintenance, should the road become a private drive. The Planning Commission commented that a private drive connection may allow the city to pick up more width on the narrow remnant city-owend parcel. The Planning Commission was generally concerned with the lack of public road connections along this larger block. The Planning Commission needs more information on this item before they can provide formal direction.
- The Planning Commission was in general support of an internal east-to-west private drive connection through the Stone Brook site. They believe the connection will help ensure the "master planned" and "downtown style" vision for the larger block comes to fruition. The Planning Commission supported the notion of placing proper easements to protect said connection for public access. The Planning Commission was open to allowing the buyer to decide exactly where that east-to-west connection be made. The Planning Commission respected the fact that the location of that connection could have an effect on the safety/ functionality of Stone Brook.
- The Planning Commissino was generally comfortable with the orientation of the Stone Brook facility as shown on the concept site plan (portions setback from Sunwood Drive). The Planning Commission mentioned they would like to see proper landscaping/ retaining walls/ etc. for the areas set back from Sunwood Drive.
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 preliminary feedback on the discussion for a required north-to-south connection between Sunwood and Veterans (i.e. Yolite) would be helpful--i.e. public versus private. Also, preliminary feedback on the proposed east-to-west internal site connection would be appreciated (master plan concept "B"). Finally, any preliminary feedback on the proposed building orientation would also be helpful (i.e. partially setback from Sunwood Drive).
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 preliminary feedback on the discussion for a required north-to-south connection between Sunwood and Veterans (i.e. Yolite) would be helpful--i.e. public versus private. Also, preliminary feedback on the proposed east-to-west internal site connection would be appreciated (master plan concept "B"). Finally, any preliminary feedback on the proposed building orientation would also be helpful (i.e. partially setback from Sunwood Drive).
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Kurt Ulrich | 03/09/2017 01:55 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 03/07/2017 08:24 AM
- Final Approval Date:
- 03/09/2017