2017.02.07 WS Agenda combined - Laserfiche WebLink

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Community Assets & Development Department MEMORANDUM DATE: February 7, 2017 TO: Manager Lotter Mayor Members of the Council FROM: Janice Gundlach, Asst. Director of Community Assets & Development/Planning Director SUBJECT: APi Option Extension Since staff drafted the work session memo on this topic dated 2-3-2017, APi has responded via email dated 2-6-2017 (attached) with another offer on their option parcel. The latest offer includes: • Buy the land now at $5/SF, cash offer to close by 2-28-2017 • Pay annual lost tax increment payments to the City beginning May 2018 and until property is developed (amount based on TIF generated by a Pulte development) • No timeline for development Staff finds this offer to be very competitive to what Pulte would be able to offer the City, based on the following points: • Pulte would pay approximately $375,000 for the land (based on 25 units of housing), whereas APi is now offering $5/SF, which equates to $413,820 (1.9 acres x 43,560 SF/acres x $5/SF). • APi proposes to make lost tax increment payments equal to what Ehler’s estimated Pulte would generate in annual tax increment ($62,206). The remaining issues include: • When does development actually occur? APi is proposing that to be open-ended. • If the City sells the land absent a development plan, there is uncertainty about what gets developed on the parcel . Staff talked with the City’s redevelopment attorney this afternoon and learned the following: • The purchase agreement for the land can include additional development provisions, such as the size of the building and what the building looks like. • We still have zoning controls through the NBE, New Brighton Exchange zoning district, which would require an office building and certain exterior material, landscaping, signage, and parking requirements. • The purchase agreement could include language to ensure a tax-paying entity retains control of the land at least until the TIF district expires. Staff recommends that if the Council likes the terms of APi’s latest offer, Council should direct staff to work with the City’s redevelopment attorney on the drafting of a purchase agreement that attempts to meet the interests of both the City and APi. This agreement would need to be approved by Council.