EDC 05-21-2013 - Laserfiche WebLink

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EDC Meeting Agenda May 21, 2013 Page 3 Due Diligence: Pulte will have 120 days from execution of the redevelopment agreement to conduct due diligence. This would include all City land use approvals (i.e. PUD,plat, zoning amendments, etc.) and MPCA approval. While ambitious,this keeps the pressure on Pulte to stay on schedule. Master Pulte will create a master association to handle the maintenance of Association: common areas within their private development. In addition, they have agreed to take on some of the responsibilities for the main entrance and north entrance; and the boulevards along Old Highway 8. This will help reduce the City's future maintenance responsibilities. Fees: The developer will pay all of the customary fees (i.e. building permits, SAC/WAC and park dedication)that are required of a typical development. Environmental: This is one of the areas that Pulte needs to explore further. The company needs to work with the MPCA to gain approval of its development plans. It is unclear how long this might take. The Redevelopment Agreement grants Pulte site access to conduct invasive testing and apply for environmental liability assurances from the agency. If these assurances can't be provided, it would be a basis for Pulte to withdraw their offer and earnest money ($50,000). Other Issues: One issue of disagreement concerned a legal mechanism known as a right-of-reverter, which gives the City the option(but not the obligation)to retake title if Pulte fails to perform. Pulte argued that they are paying cash for the site and investing substantial amounts in public improvements and are highly incentivized to make the development work. Alternative language is being drafted that will give the City the option to buy back the finished site at a pre- determined price if Pulte can't sell or develop the remaining lots or townhomes. The economics of Pulte's proposal are shown on Attachment 2. This analysis was prepared last December and shows the impact of Pulte's project, relative to some of the other redevelopment scenarios that the City envisioned. As we have discussed before, because Pulte's homes are priced in the $385,000 range,the market value of the project and tax capacity is comparable to higher density projects with lower unit values. economic impact. However, the City has no other development prospects for this site and there are some advantages to "kick-starting" commercial development with APi's proposal.