12-20-2017 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Joel Hanson, City Administrator DATE: December 15, 2017 RE: Purchase of Cash for Homes Property At our last meeting, Todd Franzen of Cash for Homes was granted extensions until today to comply with conditions relative to the PUD and plat approval for Winter Estates. Another opportunity has presented itself for the use of that property that allows us (the Little Canada EDA) to purchase the former Winter property from Mr. Franzen for $400,000 (essentially his cost). We could then assign that purchase agreement to the developer an assisted living/memory care project who, as a condition of the assignment, would seek approval of a 32 unit building on that property. Attached is a purchase agreement with Mr. Franzen that would be executed by the EDA. (Note: Mr. Franzen has indicated his approval of this agreement and we should have an executed copy by Wednesday’s meeting.) It contains a number of conditions that allow us to follow our standard approval process for the new project without any guarantees of approval (i.e. we are not usurping the planning/zoning approval process). Other contingencies include if the project is not approved, financing for the project is not obtained, due diligence investigations reveal a problem that jeopardizes the project, and performance of Seller’s obligations. Other key considerations of this purchase agreement as drafted by the City Attorney include the following: • $1,000 non-refundable earnest money. • Due diligence period of 60 days. • Closing on or before May 1, 2018 • A provision that if we do not proceed with the purchase, the City will extend the deadline to complete all conditions of plat and PUD approvals for Winter Estates until June 1, 2018. (This enables Mr. Franzen to resume his project should we choose not to proceed with the other project.) Staff is also in the process of finalizing a Conditional Assignment of Rights agreement with the new developer. It is contemplated this agreement would require the developer to assume all of the conditions and terms we agreed to in the purchase agreement with Mr. Franzen. It also requires key financial information from them to ensure the City’s and EDA’s interests are protected in this transaction. That document is still being finalized and should be available for Wednesday’s meeting.