HomeMy WebLinkAbout02-26-2018 EDA PacketLINO LAKES
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
Monday, February 26, 2018
Immediately following Regular and Special City Council meeting
City Council Work Room
1. Call to Order and Roll Call
2. Approval of Minutes – None.
3. Discussion Item
A. Legacy Land Sale Discussion – Closed Session
4. Adjourn
WS – Item #1
ECONOMIC DEVELOPMENT AUTHORITY STAFF REPORT
Close Meeting Item No. 1
Confidential
Date: February 26, 2018
To: Economic Development Authority
From: Michael Grochala, Community Development Director
Re: Legacy at Woods Edge Land Sale
Background
At the February 12, 2018 EDA meeting the board discussed competing interests in the
Legacy land. Ultimately the direction provided at the meeting was to continue
discussions with Venture Pass Partners regarding purchase of 2.4 acres of land for a
grocery store.
Staff was directed to inform Lyngblomsten that the EDA was not interested in pursuing
their project further. The EDA noted that given the existing senior facilities in the project
and desire for commercial development it was not the right fit.
Venture Pass Partners has submitted a draft Letter of Interest (LOI) to purchase the 2.4
acre tract for $574,992 or $5.50 square foot. An LOI is a nonbinding document outlining
proposed terms of a transaction. Once agreement is reached the terms will be
incorporated into a purchase agreement.
Analysis
The Venture Pass proposal’s 30,000 square foot project is estimated to have a value of $4
– 6 million. Aldi in Blaine is assessed at a total value of $1.8 million.
Land Price
The following is a comparison of Venture Pass offers to the existing Anoka County
market value, local commercial pad sales and the DR Horton sale in 2015:
Source Year Amount Acres SF $/SF $/Ac $/Unit
City/Horton (112
units) 2015 $1,000,000 11.16 486,130 $2.06 $89,606
$8,928
Anoka County 2018 $1,399,300 6.27 273,121 $5.12 $233,174 NA
Aldi (Blaine) 2015 $902,017 2.23 97,139 $9.28 $404,491 NA
Eagle Liquor 2016 $378,000 1.02 44,431 $8.51 $370,588 NA
Venture Pass 2018 $574,992 2.4 104,544 $5.50 $239,580 NA
Commercial prices can range significantly based on both location and use. Aldi acquired
the property in front of the Blaine Fleet Farm in 2015. County records show the 2.23
acre property was purchased for $9.28 square foot. The most recent comparable Lino
Lakes acquisition would be the Eagle Liquor location in the Marketplace Development.
That property sold in 2016 for $8.50 square foot.
Development Alternatives.
While the grocery use would be an excellent addition to the development and city at
large, the design requirements necessary to integrate the building into the site may not be
acceptable to the tenant. Building reuse is also a consideration. The grocer tenant is
likely to sign a 10-15 year lease with a 5 year guarantee. Additionally, the sale of only 2
acres increases the potential difficulty in marketing the balance of the property. The
buyer has requested non-compete requirements on the balance of the property. Staff has
indicated the City’s preference to sell the entire 6 acre parcel.
The Developer has indicated there willingness to act as a Master Developer for the site.
However, they want the ability for the grocery project to proceed independently of the
remainder of property
LOI Comments
Staff reviewed the draft LOI with Kennedy and Graven, the City’s Development Counsel.
An number of comments were submitted to the developer including the following:
1. Earnest Money: Developer proposed $10,000. Staff is recommending an
adjustment to 5% of purchase price.
2. Title/Survey: Buyer to pay for title commitment and ALTA
3. Declaration: Change to “Master Development Agreement and Declaration” Add
the following changes:
The parties shall negotiation work cooperatively to negotiate a Master
Development Agreement and a Declaration of Easements, Covenants,
Conditions, and Restrictions during the Inspection Period which shall be recorded at
Closing. The Declaration shall provide, among other things, reciprocal use of drive-lanes
and parking (except for the “critical parking area” depicted on Exhibit A), joint
stormwater facilities and maintenance obligations with respect to common areas. The
Declaration shall also impose Seller will also consider imposing restrictions on the lots
south of the Property for total building square footage not to exceed 10,000 square feet
with no building in the south area exceeding 6,000 square feet as set forth on Exhibit A.
There shall also be The Seller will also consider restrictions in the Urban Block that give
the grocer an exclusive use.
4. Access: Seller and Buyer will enter into a Right of Entry Agreement providing
Buyer’s contractors reasonable access to the property.
5. Seller’s Title: City will provide Quit Claim Deed
6. Purchase Agreement: Add the following: Both parties acknowledge that the
EDA Board must hold a public hearing and approve the land sale.
7. Deadline: Developer requested a response by February 23, 2018. We have
requested Friday, March 9. This may need to move to March 16th.
Staff also noted that the offered price was not commiserate with surrounding land sales.
Developer has responded that the issues raised above could be worked through and
suggested the EDA make a counter offer with regards to price.
Balancing comparable land sales with the desirability and draw of the proposed user.
Staff would suggest a counter offer of 7.50 SF. Grocery users tend to demand a lower
square foot price if they are the main anchor.
Requested Council Direction
Discussion only. Staff is requesting the EDA’s direction regarding land price.
Attachments
1. Site Location Map
2. Venture Pass Partners draft LOI
February 8, 2018
Mr. Michael M. Grochala
Community Development Director
City of Lino Lakes
600 Town Center Parkway
Lino Lakes, MN 55014
Re: Legacy at Woods Edge Development
Dear Mr. Grochala,
I am pleased to present the following Letter of Intent for the purchase of approximately 2.4 acres
within the “Urban Block” of the Legacy at Woods Edge Master Development as depicted on the
site plan of Exhibit A herein.
Below are the following terms and conditions under which Venture Pass Partners, LLC is willing
to enter into a Purchase Agreement for above referenced property. If the terms are acceptable to
the Seller, please have the Seller sign this letter below and return to my attention.
LETTER OF INTENT TO PURCHASE:
Property: The real estate of approximately 2.4 acres within the “Urban Block” of
the Legacy at Woods Edge Master Development, consisting of the
realty for a grocery store of approximately 29,000 square feet and
critical parking area (the “Property”) as depicted on the site plan of
Exhibit A herein.
Seller shall be obligated to record a plat create the subject Property
prior to sale.
Seller shall grant Buyer easements to construct, operate, and maintain
access roads as depicted in blue on Exhibit A.
Buyer: Venture Pass Partners, LLC and/or its assigns.
Seller: City of Lino Lakes
Purchase Price: Five Hundred Seventy-Four Nine Hundred Ninety-Two and no/100
Dollars ($574,992.00)
– 2 – February 8, 2018
Earnest Money: $10,000.00 payment deposited within 5 business days after execution
of the Purchase Agreement with Commercial Partners Title, LLC,
Minneapolis, MN.
Title/Survey: Seller, at its expense, is to deliver a current title commitment issued by
Commercial Partners Title, copies of any recorded instruments
reflected on the title commitment and an updated ALTA survey within
15 business days of the effective date. Buyer shall have 10 business
days after the receipt of the last of such items to review same and to
deliver to Seller written notice of any objections. Thereafter, Seller
shall have 10 business days to cure. If Seller fails to cure any
objections, Buyer may waive objections, attempt to cure, or terminate
the Purchase Agreement and receive a refund of the Earnest Money.
Any title/survey exceptions not removed as of Buyer’s waiver of
objections shall be deemed to be Permitted Exceptions. In the event
that Seller cannot deliver clean title at the Closing, Buyer may
terminate the purchase agreement and receive a full refund of all
Earnest Money.
Inspection Period: Upon execution of a Purchase Agreement, Seller shall deliver the
Seller Documents (hereinafter defined) to Buyer to determine, in
Buyer’s sole discretion, the suitability and feasibility of the Property
for Buyer’s intended use. Buyer shall have one hundred fifty (150)
days from the later of (1) execution of the Purchase Agreement and (2)
delivery of Seller Documents (defined herein) to complete its due
diligence. Buyer shall also use the Inspection Period to negotiate the
Declaration (described herein) and obtain all approvals from the City
of Lino Lakes and other regulatory or governmental agencies
(collectively the “Approvals”) to permit Buyer to use the Property for
its intend use. Buyer will have the right to elect two Forty-five (45)
day extensions (“Extension Periods”) if Buyer has not received its
required Approvals, provided Buyer provides notice to Seller of its
election prior to the expiration of the Inspection Period or the 1st
Extension Period, as the case may be, to extend the Inspection Period
to obtain Approvals.
Declaration: The parties shall negotiation a Declaration of Easements, Covenants,
Conditions, and Restrictions during the Inspection Period which shall
be recorded at Closing. The Declaration shall provide, among other
things, reciprocal use of drive-lanes and parking (except for the
“critical parking area” depicted on Exhibit A), joint stormwater
facilities and maintenance obligations with respect to common areas.
The Declaration shall also impose restrictions on the lots south of the
Property for total building square footage not to exceed 10,000 square
– 3 – February 8, 2018
feet with no building in the south area exceeding 6,000 square feet as
set forth on Exhibit A. There shall also be restrictions in the Urban
Block that give the grocer an exclusive use.
Access: Seller shall grant Buyer and Buyer’s contractors reasonable access to
the Property during the Inspection Period for the purpose of
conducting all necessary Due Diligence and Property inspections.
Escrow Terms: The Earnest Money shall be deemed non-refundable after the
Inspection Period (or Extension Periods, as the case may be) and
Buyer’s acceptance of Title/Survey. In the event the Property, in
Buyer's sole discretion, is not suitable for Buyer's intended use during
the Inspection Period or Buyer does not obtain the approvals during the
Inspection Period or Extension Periods, as the case may be, the Buyer may
cancel the Purchase Agreement and the Earnest Money shall be
immediately refunded to Buyer. Notwithstanding the foregoing, the
Earnest money will be refundable in the event of a Seller default,
Seller not being able to deliver title subject only to the Permitted
Exceptions at the Closing, or condemnation.
Closing: The parties will close the transaction within 30 days after the
expiration of the Inspection Period or Extension Periods, as the case
may be, or such other date as agreed to by the parties.
Seller’s Title: Seller will deliver marketable fee simple title to the property at
closing, via Warranty Deed
Seller’s Warranties and
Reps:
Seller to provide customary warranties and reps.
Seller Documents: Upon execution of the Purchase Agreement, Seller will immediately
provide any and all documents pertaining to the property in their
possession or control which shall include but are not limited to plans
for the property, specifications, environmental reports, geotechnical
reports, Survey, tax statements, Leases, operating agreements, notices
from any governmental authorities, Permits, and other documentation
pertaining to the Property or the Legacy at Woods Edge Master
Development. (“Seller Documents”).
Taxes & Assessments: Seller and Buyer shall prorate all taxes in the year of Closing. Seller
will be responsible for any pending or levied special assessments at
closing.
Purchase Agreement: Buyer will prepare, at its expense, within five (5) business days of
Seller’s acceptance of this Letter of Intent, a draft of a Purchase
Agreement to be reviewed, negotiated in good faith, and executed by
– 4 – February 8, 2018
both parties.
Brokerage:
The Buyer is not represented by a real estate broker.
Except for Owners intent to remove the Property from the market upon execution of this Letter
of Intent, the terms and conditions outlined in this proposal are by no means to be considered
legally binding upon either party; rather, they are for discussion purposes only. No language
contained within this proposal should be construed as a legal commitment. The parties are free
to change or withdraw any of the terms within this Letter of Intent.
Please acknowledge your acceptance of this Letter of Intent by signing below. If no acceptance
has been received by 5:00 P.M. on Friday, February 23, 2018, this Letter of Intent shall become
null and void.
Sincerely,
Dave Carland
President
AGREED & ACCEPTED:
City of Lino Lakes
By:_________________________________
Its:_________________________________
Date:_______________________________
VENTURE PASS PARTNERS, LLC
19620 WATERFORD COURT • SHOREWOOD, MN • 55331
PHONE: 952.473.1210 • dcarland@venturepass.net
Exhibit A