Update on McDonald's Project

Purpose:  The purpose of this report is to bring the City Council up to date with regard to the McDonald's project.

Background:  The last update/discussion regarding McDonald's occurred at work session on Tuesday, March 28, 2017.  At that time, Council was informed that McDonald's had not met their construction obligations under the development contract.  McDonald's had indicated a desire to continue to hold the property and develop the site when there is an appropriate level of demand to support the restaurant.  Council was presented with some options - including, court action to seek an order re-vesting title to the property, do nothing and wait for McDonald;s to develop, or negotiate a new settlement with McDonald's.  It was pointed out that the restrictive covenant on the adjacent properties has been removed since McDonald's failed to meet development deadlines. 

Consensus of the Council, following discussion, was to direct City staff to reach out to McDonald's to clarify their intent, noting that McDonald's would need to demonstrate significant interest, or the City would consider exercising their rights to reacquire title to the property. 

Staff met with McDonald's real estate representative Melissa Schmidt.  She proposed that McDonald's would likely not build in 2017 or 2018, but may be interested in proposing a five-year term, with an agreed upon amount of non-refundable money paid annually to keep the land secured.  She will have a plan more defined following a McDonald's regional leadership meeting scheduled for June 29.  Staff  would intend to meet with McDonald's following this meeting to review the details of their proposal.

Staff recommends that the Council defer action on this item until McDonald's reports back to the City in July and consider the appropriate action at that time.