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June 2, 2014 Page 2 of 4 Council Business 1. Consideration of a Redevelopment Agreement for CSI *. Report No. 14 -136. City Manager Lotter explained Community Development Director Femelius would be presenting this item to Council. Community Development Director Femelius reported in January of this year the City was approached by Ryan Companies and Colliers International about anew corporate headquarters project for New Brighton - based Cardiovascular Systems, Inc. After initial discussions, staff learned that CSI had narrowed its national search to a handful of sites in Minnesota, including New Brighton Exchange (NBE). This search process is relevant because many ofthe initial deal points, especially what CSI was willing pay for land, was a function of competing offers made by other communities. In February, the Council provided critical input on the negotiations with regard to site location, land pricing and support for assisting with certain environmental remediation and public improvement costs. On this last point, the City is continuing with a strategy to write down land prices to assist with certain extraordinary costs — a model that has been used on previous deals including Transoma and Pulte Homes. By early March, CSI made the decision to select NBE as their new corporate home and since that time the parties have been working out the details of the project through a Contract for Private Redevelopment. The negotiation process has been challenging, due to a very fast track construction schedule and the fact that three parties (the City, Ryan and CSI) have been involved in the contract review. It should be noted that the original framework ofthe deal was crafted as a build-to-suit-to- lease project with Ryan acting as the developer/landlord and CSI acting as the tenant. In early April, CSI made a business decision to own the building — meaning it would acquire the land directly from the City and use Ryan as the general contractor. In the end, this project is better described as a sort ofhybrid deal in which Ryan is functioning as a general contractor, but is participating financially like a landlord and committing resources in order to make the project work. The negotiations have been very intense and the parties seemed to have reached agreement on the major elements. Staff provided the Council with a summary ofthe key provisions and related commentary on the changes from the last Council meeting. The business terms were discussed at length. He noted the major deal points in the document have been agreed to by all parties. He noted any substantive changes (legal, economic, or material) would be brought back to the City Council for consideration. The financial and tax impacts ofthe project were reviewed in detail with the Council and staff recommended the Council approve adoption of a Resolution authorizing the Mayor and City Manager to execute the Redevelopment Agreement with Ryan Companies and CSI for an office redevelopment project in NBE. Councilmember Bauman thanked staff for the thorough presentation. She asked ifthe City has seen the agreement between Ryan and CSI. Community Development Director Femelius commented the City has not reviewed this agreement. Councilmember Bauman questioned how the City would be impacted if the terms of the agreement between Ryan and CSI were not followed through. City Attorney Landsman explained the development agreement with the City does require specific improvements to be completed by a date certain. He reported the agreement between Ryan and CSI would address how the work was completed. If Ryan did not meet these obligations, a default or breach of contract would be triggered within the City's development agreement. He discussed the investment interest that CSI had in this project to and commented this would ensure the project was completed in a timely manner according to the agreements in place. Councilmember Bauman requested further information on how Phase U would be developed. Casey Haakenson, Ryan Companies, stated Ryan would be interested in constructing Phase 11 ofthe CSI project; however, the timing ofthis project was uncertain. He explained that when CSI was ready for this expansion (Phase 11) this project would have to come back before the Council for PUD approval. Councilmember Burg commented the Council addressed the concerns ofthe Redevelopment Agreement in a worksession meeting. She appreciated the efforts of staff and all parties involved. Councilmember Jacobsen thanked each ofthe partners for coming together and for working with City staffto make this redevelopment a reality. Councilmember Bauman was pleased with the TTF implications that were agreed upon within this Council Business 1, Consideration of a Redevelopment Agreement for CSI *. Report No. 14 -136.