Loading...
031212 EDACITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes March 12, 2012 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:59 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Andy Hoffe, Commissioner Eric Lammle, Commissioner Daniel Stauner, Commissioner Staff Present: Kirk McDonald, City Manager Curtis Jacobsen, Director of Community Development Guy Johnson, Director of Public Works Valerie Leone, City Clerk Chris Long, City Engineer Steve Sondrall, City Attorney APPROVE MINUTES Motion was made by Commissioner Stauner, seconded by Commissioner Hoffe, to approve the Regular Meeting Minutes of January 9, 2012. All present voted in favor. Motion carried. IMP. PROJECT 893 President Hemken introduced for discussion Item 4, Resolution authorizing Item 4 entering into a purchase agreement with Gator New Hope, LLC, and Gator New Hope Two, LLC, for the purchase of the Kmart property at 4300 Xylon Avenue North and the Wells Fargo Bank property at 4200 Xylon Avenue North. (Project No. 893). Mr. Curtis Jacobsen, director of community development, reported at the February 21 work session the acquisition of the Kmart property was discussed. He stated at that time there were seven items of concern regarding the purchase agreement. Mr. Jacobsen stated six of the 7 items have been resolved. He stated the final item revolves around requiring Gator to provide a $90,000 escrow, to be held for one year, to protect the city from any potential relocation claims from the sub-tenant in the property, Integrity Automotive. Mr. Jacobsen indicated the seller is unwilling to provide an escrow for this purpose and reminded Council that this was not a part of the discussions for the first six months nor part of the original agreement to sell the property to the city. Mr. Jacobsen acknowledged there is some inherent risk in all major acquisitions of this type, and in an effort to minimize the risk the non- refundable escrow has been removed, provisions have been made for inspection of the property, the escrow amount has been reduced, there will be no additional escrow for the Wells Fargo parcel, provision of an estoppel EDA Meeting Page 1March 12, 2012 certificate (although probably not with waivers included) and closing on July 2, 2012. He stated the EDA can decide to walk away from this property up to the closing date. Mr. Jacobsen recommended approval of the purchase agreement. He stated the cost is $4.5 million for the Kmart property, $125,000 for the Wells Fargo property, and a maximum of $10,000 for out-of-pocket expenses. Mayor Hemken inquired whether the escrow is refundable. Mr. Jacobsen responded that it would be refundable in most circumstances. Council Member Hoffe inquired whether 15 days is adequate for an inspection. Mr. Jacobsen indicated the building official can conduct the inspection within 4 hours. Council Member Stauner noted he believes the 15- day period begins as soon as the agreement is executed. Mr. Sondrall pointed out the city would have the right to notify Gator if Kmart would refuse to allow the inspection. He also pointed out Gator would be entitled to 30 days to deal with any holdover tenant and that tenant must vacate by August 2. Council Member Stauner expressed concern regarding Gator’s unwillingness to hold $90,000 in escrow to protect the city from potential relocation claims from the sub-tenant. He also asked that item 5j (seller’s knowledge) of the agreement be amended. Mr. Sondrall and Mr. Jacobsen pointed out the risk for relocation benefits is minimal. Mr. Sondrall suggested asking Gator to split the difference by reducing the purchase price by $45,000. Mr. Jacobsen expressed his doubt that Gator would agree to such terms. He pointed out the parcel is one the city would like to acquire in order to attract a developer. Mr. Sondrall noted the purchase price is less than the appraised amount. Council Member Lammle stated he trusts the opinion of legal counsel and staff. He pointed out if it was certain that the auto shop would exercise relocation benefits the city would likely still agree to the purchase. He stated staff understands what the seller is willing to give. He recommended the city accept the risk of potential relocation as it can still walk away from the transaction on July 2 or August 2 as the case may be. Mr. Sondrall discussed the effective date of the agreement. It was noted that the Council would be meeting again on March 26 to consider the results of the property inspection. RESOLUTION 2012-01 Commissioner Elder introduced the following resolution and moved its Item 4 adoption subject to amendment of item 5j: “RESOLUTION AUTHORIZING ENTERING INTO A PURCHASE AGREEMENT WITH GATOR NEW HOPE, LLC, AND GATOR NEW HOPE TWO, LLC, FOR THE PURCHASE OF THE KMART PROPERTY AT 4300 XYLON AVENUE NORTH AND THE WELLS FARGO BANK PROPERTY AT 4200 XYLON AVENUE NORTH. (PROJECT NO. 893)”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Stauner, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Hoffe; EDA Meeting Page 2March 12, 2012 and the following voted against the same: None; Abstained: None; Absent: Lammle, Stauner; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. ADJOURNMENT Motion was made by Commissioner Hoffe, seconded by Commissioner Lammle, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:31 p.m. Respectfully submitted, Valerie Leone, City Clerk EDA Meeting Page 3March 12, 2012