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TO Mayor and City Council Agenda Section Meeting Date General Business October 7, 2019 Item Description Preliminary Development Agreement with Modern Construction of MN Request for Action Item Number 8.3 Prepared by Amanda Othoudt, EDD Reviewed by Cal Portner, Cit v Administrator Reviewed by Action Requested Approve, or deny, by motion, execution of the preliminary development agreement with Modern Construction of MN. Background/Discussion At the September 2, 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 property up for discussion is owned by multiple entities, which includes parcel #75-405-0230 and 75-405-0235 owned by the HRA. Modern Construction of Minnesota, Inc. is owned and operated by Jesse Hartung, and is a local developer. The developer requested the council consider an option agreement for the property 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. At their September 16, 2019, Work Session, it was the consensus of the council to enter into a preliminary development agreement with the developer. The agreement allows the developer to explore the idea of a multi -family, mixed -use development concept in downtown Elk River. The HRA is listed as a party to the agreement, since the HRA owns some of the property. Important components of the agreement include: Section 3 pertains to the developer's obligations which encompass all aspects of the discussion that the council discussed at their work session on the 16. Section 4 pertains to the city and the HRA's obligations to take appropriate steps to review the proposal as we would in any development scenario. Section 5 refers to contingencies. subject to any request for financial assistance, project feasibility, the project is in the best interest of the city, and the ability of the city and the HRA to agree upon the terms to convey property to the developer, with the sole understanding that this agreement does not obligate the city or the HRA to sell the properties to the developer. The Ells River Vision A welcoming community with revolution y and spirited ��sourcefulness, exceptional P ®r E B E I e r service, and community engagement that encourages and inspires prospeaztyr1gTUR