HomeMy WebLinkAboutEDA April 11, 2002
CITY OF ANDOVER
1685 CROSSTOWN BOULEVARD N,W, . ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923 . WWW,CI.ANDOVER,MN,US
CITY OF ANDOVER
ECONOMIC DEVELOPMENT AUTHORITY
SPECIAL MEETING
APRIL 11, 2002 - 6:00 P.M.
CONFERENCE ROOM A
AGENDA
.
1. CALL TO ORDER
2. UNITED PROPERTIES - Purchase Agreement
Restructuring
3. GREAT RIVER ENERGY - Staff Update
, 4. WDE SITE DEVELOPMENT - Staff Update
/
5. ANDOVER STATION ASSOCIATION ISSUES-
Discussion
6. ADJOURN
,
CD
, CITY OF ANDOVER
,
/
1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923. WWW,CI.ANDOVER,MN,US
TO: EDA President and Board
FROM: John Erar, Executive Director
SUBJECT: United Properties Development Contract - Restructuring of Terms
DATE: April 11, 2002
INTRODUCTION
In recent conversations with United Properties, my office has been informed that the residential
developer, Hans Hagen Homes, is no longer involved in the residential development project. As a
result, United Properties has requested that certain aspects of the original agreement be
restructured as described below.
DISCUSSION
/ Mr. Keith Ulstad, Vice-President for United Properties, has proposed the following changes to
the original purchase agreement for Andover Station.
. Close on the Commercial Parcel comprising 501,903 sq. ft. approximately, to be
purchased at the originally agreed contract price of $3.20 sq. ft. no later than April 19,
2002. This represents a total purchase price of $1,606,089. The purchase price may vary
depending upon the total square footage that would be calculated to include Quinn Street
and extending approximately 8' easterly of Quinn Street beginning north from Bunker
Lake Boulevard and traveling south to Commercial Boulevard.
. United Properties requests that their proposed purchase of the Residential Parcel
comprising 376,578 sq. ft. approximately, be extended in the form of a 12 month option.
In consideration of the EDA granting a 12 month option to purchase the residential
parcel, the company agrees to pay the EDA $452,000 as an Option Premium to expire on
April 15, 2003.
0 If United Properties fails to close on the residential parcel by April 15, 2003, the
EDA retains the Option Premium of $452,000 free and clear.
0 If United Properties is able to close on the residential parcel no later than April 15,
2003, the EDA would agree to credit the Option Premium against the sale price of
the residential property. A credit of $452,000 against the residential sale price of
$3.20 would amount to approximately $1.20 per sq. ft. credit leaving
approximately $2.00 a sq. ft. at the proposed date of residential closing
established at April 15, 2003. In further consideration of the EDA's willingness
to grant a 12-month option, and in recognition of the inflationary factors affecting
land costs, United Properties is willing to split any per sq. ft. sales over the
remaining $2.00 sq. ft. on a 50/50 basis. For example, if United Properties were to
sell the residential parcel at $2.50 sq. ft., the EDA would be entitled to an
additional .25$ per sq. ft. Under this scenario, the EDA could theoretically be
entitled to an additional $94,144.
. Finally, United Properties accepts the Option on the residential parcel unconditionally,
meaning there is no guarantee of plat or development contract approval by any body of
the City i.e. ARC, the EDA, the Planning & Zoning Commission or the City Council.
Conditions of approval would be subject to standard and reasonable considerations of the
ARC, EDA, Planning & Zoning Commission and City Council.
BUDGET IMPACT
Financial incentives provided by United Properties in their restructuring proposal would exceed
original land sale earnings projections.
ACTION REOUlRED
Consider approval of the proposed changes in development contract terms and conditions for the
Andover Station as offered by United Properties.
y submitted,
Keith Ulstad, Vice-President, United Properties