6.1. EDSR 12-21-2015 - Laserfiche WebLink

Home Browse Search

Request for Action To Item Number Economic Development Authority 6.1 Agenda Section Meeting Date Prepared by General BusinessDecember 21, 2015Amanda Othoudt, EDD Item Description Reviewed by Letter of Intent to Purchase 17565 Tyler Street Cal Portner, City Administrator NW, Elk River, MN Reviewed by Action Requested Approve, by motion, the Letter of Intent received for 17565 Tyler Street NW, Elk River, MN. Background/Discussion The city received a Letter of Intent to purchase 17565 Tyler Street NW from Robideau Properties, LLC, to develop a 20,000 sf industrial building with a small amount of outside storage for trailer and equipment storage. The letter proposes $2/sf, the previously directed asking price, $10,000 earnest money, and the seller paying the brokerage fees of 3% of the purchase price at closing. The proposed due diligence period is 120 days of an executed purchase agreement, which the buyer anticipates a late March/early April after satisfactory government approvals on subsidy and land use applications. Contingencies include, environmental testing, land use approvals (site plan/conditional use permit approval), and financial incentives from the city. They expect to close within 30 days after satisfaction of all conditions. The EDA Finance committee reviewed the letter of intent and recommended approval of the terms to the EDA with the addition of language to clearly indicate a defined duration of the “Non-shop” provision on the letter of intent as recommended by our legal counsel. “The provisions of this paragraph shall expire upon the earlier of (i) the date a Purchase Agreement is executed by the Buyer and the Seller or (ii) 120 days after the date the Seller signs this letter of intent.” The request for the seller to pay the buyer’s brokerage fees has never been considered in past transactions and would be considered as part of the complete package, a business subsidy, if coupled with additional public financing. The buyer has indicated within their letter of intent that they intend to apply for additional public financing and that amount of financial assistance is unknown. Based on past practice, staff recommends conveying the property to the buyer at the full market rate of $2/sf with the buyer paying their broker fees. The EDA should consider business subsidies in their proper context for the project. Financial Impact N/A Attachments  Letter of Intent to Purchase  Site Map