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Ulf ReportNumber 10476 MN Agenda Section V14 nc MY was awaer rm Council Meeting Date July27,2010 REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRH' 0141: Consideration of Request by Ryan Companies US, Inc. for Reimbursement of 2002 AUAR and Engineering Costs. DEPARTMENT HEAD'S APPROVAL: Chun Fenrelius, Community Development Dhcmor 4P.ti= CRY MANAGER'S APPROVAL: Ne comments to supplement this repmdS" Commend at hm Recommendation: Authodu staff w reimbwse Ryun Companies US, Inc. in the amount of $20,000 for preparation oftbe 2002 AUAR and engineering costs in the Northwest Quadrant. Legislative History: Junuary I, 2002 The City and Ryan Companies US, Inc. (Ryan) entered into a Contract for Exclusive Negotiations and Consulting Agreement related m the Northwest Quadrant. A copy of the agreement is attached for reference purposes. Financial Impact. $20,000 .Explanation: In 2002, the City aM Ryan entered mm an agreement for the pwdrvclopmamt planning/engineering and envimmmental analysis of the Northwest Quadrant. Based on a review of documents, Ryan was to prepare the Alternative Urban Areawide Review (AUAR) and other preliminary engineering work in advance of entering into a redevelopment contract. Ryan had exclusive rights to negotiate with the City through March 31, 2003; urdess it exmaed a redevelopment contract. The parties were unable to reach agreement on a redevelopment contract by the deadline and Ryen eventually lost its exclusive negotiation rights. However, the City was obligated to repay Ryan for the AUAR and engineering costs within 30 days of receiving an invoice. Ryan did not submit an invoice until October 2006. rnfonnully they cited second reasons for the delay, including a change in Ryan staff and a desire to maintain ugood relationship with the City. In the fall of 20M and winter of 2007, Ryan and the City began talking about office development opportunities. Ryan did not push the reimbursement issue and by mid -summer 2007 negotiations were underway for the "fmnsoma pmjem. During the negotiations, the AUAR renmbwsement was Incorporated into the redevelopment contract, but only to the extent that it could be used as a credit against the purchase price of the option parcel. The company did not waive its right to reumburseme at in the event the option rights were not exercised. Earlier this year Ryan sold the former TransomefrSl building to a Carudmat investor. Neither Ryan nor DSPTraosoma wanted to exercise their option right. Since the sale, Ryan has requested reimbursement of the 2002 expenses. Staff has reviewed the original invoices, which exceeded $300,000, and found •them m be acceptable. In addition, we asked the city attorney to review the file and confirm the City's reimbursement obligations A copy ofhis email is also attached.