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Pulte Homes Agreement June 7, 2013 Page 2 Attachment 1 is a copy of the finalized Contract for Private Redevelopment with Pulte Homes of Minnesota. The following is a summary of the main business terms. Development The plan calls for 86 single-family homes with an average sales price of Scope: $385,000 (but not less than$365,750) and 34 townhomes with an average sales price of$170,000 (but not less than$161,500). The design of the townhomes is still yet to be determined. At least 12 of the townhomes would be priced to make them affordable, consistent with our Met Council grant agreement and Livable Communities Program. Under current Met Council affordability guidelines,the $170,000 townhome pricing would be considered affordable owner-occupied housing. As an aside, the current affordability threshold is $241,700. Land Price: Pulte has agreed to pay $2,309,650 for the site. This price breaks down to roughly$85,542 per acre before adjustments are made for environmental remediation. Because there is additional environmental remediation to be done and potentially additional clean soil (beyond what the City has already imported),the parties have agreed to escrow$1,000,000 at closing. These funds would be available for Pulte to use for environmental/soil import and any remaining funds would be distributed to the City. At a minimum,the City would receive $1,309,650 in net cash for the land, which is consistent with a third-party appraisal completed for the City in January of this year. It is important to keep in mind that the net land price reflects the fact that Pulte is paying for and installing the public improvements. These are costs that Pulte will build into the pricing of their finished lots and thus impacts what they can pay for the raw land. Attachment 2 is a short analysis that shows what the developer's anticipated costs are relative to the net proceeds received by the City. Phasing: Pulte will take the site down in a single closing that will occur by October 15, 2013, or 30 days after all City and MPCA approvals, but not later than December 31, 2013. Public As mentioned above, Pulte will install and pay for all of the public Improvements: improvements. These include streets, curb and gutter, sanitary sewer, storm sewer, water mains, sidewalks and trails. The preliminary cost estimate is $2,282,800. I:\COUNCIL\REPORTS\2013\Community Development\6-11-2013\Pulte Redevelopment Agreement doe(Staff Report- V11).doc