4.2.
Economic Development Authority (EDA)
- Meeting Date:
- 03/08/2018
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Title:
Maple Investments LLC (Sharp & Associates) Purchase Agreement [portions of this case may be closed to the public]
Purpose/Background:
PURPOSE
Consider the attached purchase agreement (purchase offer of $93,110 or $2.25 psf) from Maple Investments LLC (Sharp & Associates) for a 0.95-acre City-owned property, for a roughly 9,700 square foot speculative industrial building.
BACKGROUND
Site Information
The subject property is located at 6590 141st Avenue NW within the City's original business park, just north of Ace Solid Waste. This 0.95 site is located off Basalt Street and Bunker Lake Boulevard and is currently zoned E-1 Employment District. This property was purchased by the City in 2006 for redevelopment purposes for a price of $211,200; at which time, existing improvements were removed. This site has sat vacant, tax exempt, and available for sale since 2006. This property is currently being listed for $105,000 (2.50 psf). Attached to this case is the property listing.
When the site was purchased by the City in 2006, some CDBG funds were utilized (Anoka County). If the city were to close this PA, a portion of land proceeds, likely $10,000-$20,000, will need to be repaid to the CDBG fund (Anoka County).
Sharp & Associates
Sharp & Associates is perhaps the most well known "business park" developer in Ramsey. Sharp has several properties in Ramsey, and several others located in Anoka, Maple Grove, and Elk River. The majority of Sharp's buildings are small-bay multi-tenant buildings. This type of product is rare for a developer to specialize in, and to do so successfully.
Staff believes the buildings that Sharp has established in Ramsey have played a major role in Ramsey's overall success in economic development. Reason being, Sharp has created a model very close to a private sector business incubator(s). Sharp attracts new and small business to his affordable, right-sized multi-tenant buildings... then, when they are ready to expand or build a new building, they work with Sharp (and typically stay in Ramsey). Sharp has constructed 10+ owner-occupied buildings in Ramsey for said tenants. Staff believes Sharp is one of Ramsey's greatest development relationships/ partners. This project generally fits the mold outlined above.
Proposed Project
Sharp is proposing a roughly 9,700 square foot speculative industrial building. Please see attached concept map and rendering.
Consider the attached purchase agreement (purchase offer of $93,110 or $2.25 psf) from Maple Investments LLC (Sharp & Associates) for a 0.95-acre City-owned property, for a roughly 9,700 square foot speculative industrial building.
BACKGROUND
Site Information
The subject property is located at 6590 141st Avenue NW within the City's original business park, just north of Ace Solid Waste. This 0.95 site is located off Basalt Street and Bunker Lake Boulevard and is currently zoned E-1 Employment District. This property was purchased by the City in 2006 for redevelopment purposes for a price of $211,200; at which time, existing improvements were removed. This site has sat vacant, tax exempt, and available for sale since 2006. This property is currently being listed for $105,000 (2.50 psf). Attached to this case is the property listing.
When the site was purchased by the City in 2006, some CDBG funds were utilized (Anoka County). If the city were to close this PA, a portion of land proceeds, likely $10,000-$20,000, will need to be repaid to the CDBG fund (Anoka County).
Sharp & Associates
Sharp & Associates is perhaps the most well known "business park" developer in Ramsey. Sharp has several properties in Ramsey, and several others located in Anoka, Maple Grove, and Elk River. The majority of Sharp's buildings are small-bay multi-tenant buildings. This type of product is rare for a developer to specialize in, and to do so successfully.
Staff believes the buildings that Sharp has established in Ramsey have played a major role in Ramsey's overall success in economic development. Reason being, Sharp has created a model very close to a private sector business incubator(s). Sharp attracts new and small business to his affordable, right-sized multi-tenant buildings... then, when they are ready to expand or build a new building, they work with Sharp (and typically stay in Ramsey). Sharp has constructed 10+ owner-occupied buildings in Ramsey for said tenants. Staff believes Sharp is one of Ramsey's greatest development relationships/ partners. This project generally fits the mold outlined above.
Proposed Project
Sharp is proposing a roughly 9,700 square foot speculative industrial building. Please see attached concept map and rendering.
Notification:
Observations/Alternatives:
OBSERVATIONS
Listed below are terms/ conditions/ observations related to the attached purchase agreement that staff considers important to highlight for potential discussion.
(1) Policy Compliance
Staff has no policy compliance concerns. This project is not requesting a formal business subsidy, the City's Revolving Loan Fund, or State DEED Programs. The attached PA is simply an edited version of the City's adopted "template PA."
(2) Offer Price
$2.25 per square foot or $93,110.
(3) Earnest Money
$7,500, to become non-refundable after inspection period.
(4) Inspection Period
July 01, 2018 (close 30 days after).
(5) Extension Option
If the buyer decides to extend the PA, they will be required to place $10,000 of additional non-refundable dollars in earnest for each 60 day extension (maximum two extensions allowed).
(6) Construction Deadline
Minimum 9,000 sf building by December 31, 2019.
Staff has no policy compliance concerns. This project is not requesting a formal business subsidy, the City's Revolving Loan Fund, or State DEED Programs. The attached PA is simply an edited version of the City's adopted "template PA."
(2) Offer Price
$2.25 per square foot or $93,110.
(3) Earnest Money
$7,500, to become non-refundable after inspection period.
(4) Inspection Period
July 01, 2018 (close 30 days after).
(5) Extension Option
If the buyer decides to extend the PA, they will be required to place $10,000 of additional non-refundable dollars in earnest for each 60 day extension (maximum two extensions allowed).
(6) Construction Deadline
Minimum 9,000 sf building by December 31, 2019.
Funding Source:
NA
Recommendation:
STAFF REVIEW
If there is desire to make a counter offer on price, staff will suggest the attached PA be discussed in closed session. Staff is not making that request. RE price, staff would note, a negotiation on price has gone back-and-forth between staff and Sharp, and $2.25 was the best price staff was able to achieve.
Below are some project benefits worth noting:
If there is desire to make a counter offer on price, staff will suggest the attached PA be discussed in closed session. Staff is not making that request. RE price, staff would note, a negotiation on price has gone back-and-forth between staff and Sharp, and $2.25 was the best price staff was able to achieve.
Below are some project benefits worth noting:
- This project was pulled from the CBRE listings contract in 2017, no commission payments are anticipated.
- This project does not include any incentives, such as TIF. As a result, it will have an immediate positive impact to the general tax levy.
- This project is estimated to generate about $25,000 in total annual property taxes. Ramsey receives roughly 1/4 of commercial property taxes.
- This project is speculative--meaning, tenants are unknown at this point. Therefore, job count predictions are challenging to make. At full occupancy, staff would predict the creation of 5-50 jobs, depending on the tenants.
- This project will collect development fees, estimated at about $20,000-30,000.
- This project does help Ramsey accomplish goals outlined in the Council Strategic Action Plan and EDA Workplan.
- Staff believes Sharp is a quality developer with a good track record in Ramsey; especially with Ramsey's business community.
- Speculative industrial buildings place Ramsey in a strong position to recruit new businesses and retain expanding businesses.
Action:
Motion to Recommend the City Council:
[Approve/ deny/ amend] the attached purchase agreement between the City of Ramsey and Maple Investments LLC for 0.95 Acres of City-owned land.
[Approve/ deny/ amend] the attached purchase agreement between the City of Ramsey and Maple Investments LLC for 0.95 Acres of City-owned land.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Kurt Ulrich | 03/02/2018 09:14 AM |
- Form Started By:
- Patrick Brama
- Started On:
- 02/28/2018 06:51 PM
- Final Approval Date:
- 03/02/2018