07/23/2007 Council Packet (2) - Laserfiche WebLink

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utility relocation etc. suggest costs in the range of $800,000. However, a feasibility study is required before actual costs are known. After consideration of selling the city -owned land to Anderson Builders, the council will consider a preliminary development agreement that sets out the actions that must occur to move forward with the realignment and additional commercial development. These activities allow for the developers to move ahead with their Phase I project and complete a site plan for future phasing. Meanwhile the city can complete a feasibility study for costs of the realignment, and determine what can be assessed to benefiting properties. In this instance, the developer is able to provide the city with assurance that the developer will transfer control of that portion of properties needed for realignment. This provides the city with site control it does not currently have for the future realignment. The cost of the right -of -way will be determined based on the developer's pro rata cost of acquiring the properties, not to exceed $12 /sq. ft. Once costs of realignment and applicable assessments are determined from the feasibility study, proceeds of the sale of the city property and assessments will be tools available for realignment of the road. Phase I Development Plan As requested by Councilmember Carlson, In Section 35(a) of the agreement, Special Provisions Relating to the Development, wording has been added so that the section reads" When Purchaser constructs building improvements on the Subject Property, "Purchaser shall construct such improvements in substantial conformance with the Development Plan (Exhibit H) to generally include approximately 26,900 sq. ft. of professional office, medical and multi - tenant retail development unless otherwise consented to by Seller, which consent will not unreasonably be withheld." Section 35(b) of the purchase agreement restricts uses on the property to ensure that the property will not be used for the purposes of a stand -alone fast food restaurant, gas station or auto repair or service facility, or an abortion clinic. Because the city is selling the land, the city council has an opportunity, if it so chooses, to set these parameters to encourage additional diversity of commercial uses in the Town Center. Sale Price of City Land An appraisal of the city property was completed in January 2007 that valued the city land at $1,118,000. Based on existing conditions, the actual purchase offer, and use restrictions within the development agreement, Springsted, Inc. recommended updating the appraisal. And updated appraisal in June 2007 placed the property's value at $815,000. The purchase offer is $830,000, with some adjustment that will be calculated for an existing storm water pond for Lake Drive. The city is not reducing the asking price of the land. Once the city received • •