06-27-2018 Council Packet - final

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STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Joel Hanson, City Administrator DATE: June 22, 2018 RE: Amendments to Q3 Purchase Agreement As you will recall, the goal was to close the Q3 transaction by June 30th so the property would be taxable for pay 2019. Q3 is asking to extend the closing date until August 31st and is willing to forfeit the penalty. Here are the issues that are delaying closing: • An underground storage tank was discovered on the Roseville Plumbing site. It appears that it was a heating oil tank and is likely around 1,000 gallons in size. This tank will need to be removed and it is recommended the City/EDA be responsible for this cost. Quotes obtained by Q3 indicate the removal cost is estimated at $4,400. Costs could increase if the tank has been leaking. It should also be noted that in our purchase agreement with Roseville Plumbing, there was a provision that they would remove any tanks on the site. However, that representation had a two year survival limit and we purchased the property back in 2010. • Storm water control is still being investigated. The City Engineer is reviewing this area given the impact water from this area has on Ryan Industrial Park and the future need to reconstruct Woodlyn Avenue. Using storm water piping, the costs to serve the Q3 site are over $200,000 and over $800,000 to serve Woodlyn. The City Engineer is evaluating the possibility of a drainage swale to run along the west side of St. Paul Regional Water’s right-of-way given the water we would be collecting is already ending up in this area. I believe this could substantially reduce the storm water costs. Also, I have asked the City Engineer to make sure it is clear what level of improvements we are required to undertake to be compliant with development regulations versus those that would be done to improve existing conditions. • Utility easements need to be obtained in the area of the current driveway. I do not anticipate that to be a problem given the driveway easement that exists and the fact it will be improved dramatically when the site develops. • We need the final drawing of how Q3 will provide access to the two cell towers. They provided a drawing should be a workable solution, but it did not show the 2nd tower. That exhibit could be used in the finalization of the cell tower lease transfers if we can get it quickly. Q3 and the City Attorney are reviewing this amended purchase agreement. I have asked the City Attorney to be present at Wednesday’s meeting to aid in the review of this matter. Cc: Chad Lemmons Lee Elfering