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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br /> <br />Request for Action <br /> <br />To <br />Housing and Redevelopment Authority <br />Item Number <br />3.1 <br /> <br />Meeting Date <br />August 20, 2024 <br />Prepared By <br />Brent O'Neil, Economic Development Director <br /> <br />Item Description <br />Consider Amendment Four to Main and Gates <br />Purchase Agreement <br />Reviewed by <br />Brent O'Neil <br />Cal Portner <br /> <br />Action Requested <br />Approve, by motion, Amendment Four to the Purchase Agreement for the sale of the Main and Gates <br />Property. <br /> <br />Background/Discussion <br />As discussed at the most recent HRA meeting, Ron Touchette, the buyer of the Main and Gates properties, <br />has requested additional changes to the purchase agreement on the property by submitting a draft a fourth <br />amendment to the agreement. These requests are summarized as follows: <br />▪ A seller credit of $53,939.00 to repair and restore non-compacted soils and buried debris associated <br />with demolition and fill of former structures on the properties. <br />▪ Certifications and warranties against utility disconnects or restorations associated with previous <br />structures. <br />▪ Warranties regarding buyer responsibility to maintain the existing water service to 425 3rd St. NW. <br />▪ Buyer's right to extend due diligence through building permit approval. <br />▪ Clarification of buyer and seller requirements regarding a supplemental development agreement. <br />▪ Adding a provision allowing the buyer 90 days to cure failures and defaults under the right of re-entry <br />(reverter) clause. <br /> <br />Following review with legal counsel, staff can support many of these requests, subject to modifications <br />proposed by counsel. Further, staff has been doing its own diligence and believes issues of previous utility <br />disconnects and restorations have been sufficiently performed during demolition. Regarding compacted soils, <br />it is staff's understanding from past meetings with the HRA that the HRA is not inclined to support a seller <br />credit. Therefore, it is not included in the final draft Amendment Four. However, it remains an active request <br />of the buyer and will be presented at the meeting. <br /> <br />Financial Impact <br />None anticipated, however, some of the warranties have potential costs in the event a warranty action <br />occurs, with a maximum exposure estimated at $25,000. Further, should the HRA support a credit to the <br />buyer, the net proceeds to the HRA at sale will be reduced accordingly. <br />Page 2 of 45