EDC 06-18-2013 - Laserfiche WebLink

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NOTES TO ECONOMIC DEVELOPMENT COMMISSION AGENDA June 18,2013 IV. New Brighton Exchange A. Update on Pulte Homes and API Group Projects At their meeting on June 11th,the Council approved both the redevelopment agreement with Pulte Homes and the term sheet with APi Group for their respective projects. The following is a short summary of the next steps. Pulte Homes A couple of points worth noting about the final agreement. At the May EDC meeting, staff reported that Pulte would buy the site in two phases; purchasing half the site this year and the balance of the site in 2014. In addition,the City was seeking to have an option to purchase back any land from Pulte, in the event of a default. This request was intended to address the right-of-reverter; a legal mechanism that gave the City the ability to take back the site, which Pulte struck from the agreement. Pulte argued that they are paying cash for the land and investing a substantial sum in public and site improvements. As such,they are highly incentivized to carryout the project. In addition,the company will be required to provide security at closing(i.e. letter of credit or bond) for the value of the public improvements. In this case, Pulte will have significant "skin in the game" and is unlikely to walk away from the project. This also diminished the need for a phased closing, so now the City will receive the net purchase price ($1.3M) at closing. The parties will still escrow an additional $1.0M at closing for any remaining environmental contamination or fill soils. On June 14th the company met with its environmental consultant and drilling company to review the proposed locations of soil borings. This work will be critical in understanding the condition of the site, especially in preparing site plans and seeking environmental assurances from the Minnesota Pollution Control Agency. It should be noted that the City is still importing additional clean fill on the site. Shafer Construction has imported about 50,000 to 60,000 cubic yards of clean fill and plans to haul an additional amount in the next week. The company is moving between about 8,000 CY per day. Photos of the Shafer import project and job site meeting with Pulte are shown on Page 2 Pulte has 120 days to conduct due diligence work. The closing date is scheduled for October 15th. The company has indicated they would like to close sooner. During the due diligence phase the company will also seek various governmental approvals, including land use/zoning review from the City and environmental assurances from the MPCA. APi Group Now that the term sheet has been approved, API Group is very eager to start working on the redevelopment agreement and other project details. APi Group will also have 120 days (October 15th)to complete due diligence and enter into a contract with the City. The company is on an equally ambitious schedule.