Agenda Packets - 1997/10/06 - Laserfiche WebLink

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LL Item No. �T Staff Report No. 97-o;).3O C Meeting Date 10-6-97 • Type of Business WK WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View Economic Development Authority Work Session Staff Report To: Mounds View Economic Development Authority From: Cathy Bennett, Director of Economic Development Item Title/Subject: Discussion of Draft Purchase Agreement for 2625 Highway 10 Date of Report: October 2, 1997 At a special work session on August 18, 1997 the City was presented with the preliminary discussion regarding a commercial development that included EDA owned land at 2625 Highway 10. With a favorable response, Told Development has proceeded to draft preliminary site plans and has negotiated purchase agreements for several homes on Eastwood. Told Development met with City staff to discuss the process involved for a rezoning, revision of the comprehensive plan, major subdivision, vacation of a portion of Eastwood and Development Review. • Attached is a draft purchase agreement prepared by Told Development and reviewed by Real Estate attorney Larry Wertheim of Kennedy& Graven. Told Development is proposing to purchase the property for$125,000 with$10,000 earnest money as a deposit. Mr. Wertheim made revisions to the draft purchase agreement and is comfortable with the agreement but felt that the EDA should be aware of and discuss a couple of policy items. The purchase agreement contains a review date of 180 days to enable Told Development to perform their due diligence on the property. As the agreement currently is written Told will have the option to extend the review date for two consecutive periods of 90 days each with the deposit of $5,000 for each extension. A purchase agreement is typically written which would allow the seller to retain a portion or all of the earnest money if the sale does not occur as compensation for taking the property off the market. It is of Told Development's understanding that since this proposal requires commitments for land assembly and cooperation with the City and significant risk and costs are going to be incurred by the developer to perform the due diligence then they should not be obligated to risk additional funds if the proposal does not go though. Told feels that they are offering a purchase price above market value to compensate the EDA for their insight in purchasing the property. My suggestion would be to at least add a provision that if the buyer terminates the agreement by reason of any of the contingencies then the EDA would be eligible to at least collect out-of-pocket expenses (attorney fees) for the transaction relating to the sale. • The other item the EDA may want to address is an assurance that the property would be protected against such uses in the future such as adult-book store. We have not exactly worked