9.3. SR 09-16-2019 - Laserfiche WebLink

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EGty1� ,.,�� Request for Action River To Item Number Mayor and City Council 9.3 Agenda Section Meeting Date Prepared by Work Session September 16, 2019 Amanda Othoudt,EDD Item Description Reviewed by Downtown Development Proposal Cal Portner, City Administrator Reviewed by Action Requested Items presented for discussion purposes. Background/Discussion At their September 3, 2019,Work Session, the City Council heard a presentation by Modern Construction on a high density,market rate,mixed-use development concept in downtown Elk River. The developer requested the Council consider an option agreement for the property that the city and HRA own within the project area. Council directed city staff to research other agreements that can accomplish the developer's objectives,while limiting the risk of the city. The agreements below are all similar in nature,with the exception that the option agreement is more favorable to the developer/buyer because the land can be under site control. Option Agreement: The option agreement is a binding agreement between buyer and seller. It requires the buyer to pay an option payment in an amount to be negotiated by the parties. The option payment is nonrefundable under most circumstances and would be applied to the property purchase price purchase is exercised. An option agreement can have a contingency allowing the city to back out of the sale in the event the buyer's proposal is not satisfactory to the City Council. Letter of Intent: This is a nonbinding"agreement"between buyer and seller on the terms of the purchase of the property. No money is exchanged as it is simply an expression by the buyer of its intent to purchase the property pursuant to the agreed-upon terms. Purchase and Predevelopment Agreement: This agreement gives the developer time and access to the property to inspect, explore development ideas/options, and explore financing options. The city would agree it would not negotiate with any other developers during the term of the agreement. It would state the city is willing to sell the property to the developer provided that the developer has the resources and experience necessary to move forward. The city can request the developer complete certain tasks within the predevelopment agreement in order to show that the developer is acting in good faith. No money is exchanged. The Elk River Vision A PehoMing community 2a itb revolutionary and spirited resourcefulness, exceptional POWERED By service, and community engagement that encourages and inspires prosperity INAMIRE1