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61 E 6 ASSOCIATES INC To: Mike Morrison— City Manager ® From: Stacie Kvilvang—Associate Financial Advisor 2 UJ Subject: Stonehouse Redevelopment Date: July 16, 2003 Overview: At the May 13, 2003 City Council meeting the Council approved entering into a Pre-Redevelopment Agreement with Amcon Construction for the redevelopment of the Stonehouse/SAV I and Fire Station site. At their June 23, 2003 meeting, the Council approved proceeding with redevelopment of the Stonehouse property in accordance with redevelopment option #4 in which the City will retain a portion of the land for the City's Liquor Store and sell the remaining land to Amcon. Amcon will construct the new retail development and the City will utilize the land sale proceeds to offset the cost of purchasing the new Liquor Store from Amcon. Since that time, the City Attorney, Ehlers and Associates and City Staff have been working with Amcon to prepare a Purchase and Development Agreement that outlines the business points of the proposed transaction. Following is a summary of the provisions within the Agreement: 1. The Project. The project involves the acquisition of the existing property from the City for $640,000. Amcon construction will then construct a total of 26,000 sq/ft of retail space, which will include a new Municipal Liquor Store, a restaurant and additional retail space. 2. Hennepin County Easement. The County will vacate its easement on the property in August and turn it over to the City. In return the City will be required to pay the County $55,000 for the easement. 3. Financing of the New Liquor Store. The cost to construct and furnish the new liquor store is approximately $950,000. The City will utilize its $585,000 in land sale proceeds (net after payment to the County), along with a $365,000 internal loan to finance the acquisition of the new Liquor Store. The internal loan will be paid back through Liquor Operations. 4. Closing. Closing shall take place no later than September 8, 2003. The City will provide the Developer with a Quit Claim Deed and keys to all locks located on the property. 5. Construction Plans. The Agreement requires that the Planning Commission and City Council have approved the development plans, along with other regulatory approvals, prior to closing on the property. 6. Commencement and Completion Dates. The Developer shall commence construction of the Minimum Improvements by October 1, 2003 and substantially complete the construction of them by March 31, 2003.