HomeMy WebLinkAbout4.a. Genz Ryan Purchase Offer
EXECUTIVE SUMMARY
Port Authority Meeting Date: June 29, 2015
AGENDA SECTION:
AGENDA ITEM:
Purchase Offer for Remainder of Genz
New Business
Ryan Site
PREPARED BY: AGENDA NO.
Kim Lindquist, Deputy Director4.a.
ATTACHMENTS: APPROVED BY:
Draft Purchase Offer
RECOMMENDED ACTION: Motion
to Approve Purchase Offer Price
ISSUE
As the Port Authority knows the City has been marketing the old Genz Ryan site for some time to attract
new development. The City had purchased the property in 2006 as part of the Downtown Redevelopment
initiative. Currently, the CDA senior housing project is under construction in the northern 1/3 of the site.
The remaining approximate 1.57 acres is partially encumbered by the access easement and drainage and
utility easement. Staff estimates the total buildable space is closer to 1.29 acres. It is difficult to make a
direct comparison about price between the two projects since the CDA project benefited from .28 acres of
access and drainage improvements which are not on their site. We have provided a table which allocates ½
of the road area to each of the two properties, regardless of which lot, as well as the portion of land on this
site which will be used for a rain garden benefiting the CDA project. This shows that the CDA paid
slightly more, about $0.50/square foot, than the current proposal. However, there are other issues to
consider rather than simply price; the proposal will pay property taxes, the project is a retailer who will
bring new traffic downtown, the City has been interested in attracting additional restaurant uses, and the
City also paid $40,000 for additional land acquisition associated with the CDA project. In general, staff
believes the $325,000 offer is within the appropriate price range based upon the previously approved CDA
sale, which was based upon an appraisal.
Total CDA Proposed
Useable Proposed
Proposal Encumbered Gross Rate Per CDA Price Rate Per
Area Price
Area Sq Ft Sq Ft
0.10 Acre
Rain Garden
50,530
CDA
0.97 Acres $5.94 $300,000
Sq Ft
0.09 Acre
Access
0.09 Acre 60,113
Culvers
1.29 Acres $5.94 $357,071 $5.41 $325,000
Access Sq Ft
The property is actually comprised of 4 lots, two of which the City purchased with the Genz Ryan
purchase and two from excess right of way obtained from MnDot. The City has also invested in the site by
demolishing the previous structures, updating site infrastructure, and removing some contaminated soils.
However, the intention has not been to recoup all financial investment into the site. As we have discussed,
redevelopment is more expensive than green field development. The costs for most of the land and
demolition have been financed through the Downtown TIF District or through grants received, meaning
general fund dollars have not been used.
As can be seen from the offer, the intention is to place a Culvers restaurant with a drive-thru on the
property. While differing from the development concept furthered in the Development Framework for
Downtown Rosemount, that concept was negated with the sale of land and approval of the CDA senior
housing project. The concept of introducing a Culvers into the Downtown is consistent with the
Framework from the standpoint of
attra...
ability to attract a restaurant to the site will aid in drawing consumers Downtown assisting other businesses
currently located in the area.
One issue of note is that the Downtown Zoning presently does not permit drive-thru facilities for
restaurants. Should the Port Authority accept the offer to purchase, City staff has indicated we will bring a
text amendment forward to the City Council, concurrent with the necessary Culvers planning applications,
to permit the drive-thru use. As with all purchases, which will be reflected in a final Purchase Agreement,
the buyer must receive all city approvals to allow the project to move forward. Approval of the offer does
not mean that the City Council will approve the project; the formal review and approval process is still
required.
Port members will note there are numerous items highlighted for potential modification in the attached
document. While it appears that there are many requested changes, some are really more of a clarification
and many are related to future actions necessary. Staff is asking the Port Authority to approve the offer at
the noted purchase price. We would like some flexibility about the other items. If there are significant
changes, those items could be deferred until the purchase agreement.
RECOMMENDATION
Motion to approve the purchase offer with purchase price of $325,000 subject to recommended
modifications noted by staff.
2
June 17, 2015
VIA Email: kim.lindquist@ci.rosemount.mn.us
Ms. Kim Lindquist
Community Development Director
City of Rosemount
2875 145th St. W.
Rosemount, MN 55068-499
RE: Rosemount Land
Offer to Purchase
Rosemount, Minnesota
Dear Kim:
On behalf of Maria Veach, s, Diehl and Partners LLC we are pleased to submit the
following Offer to Purchase approximately 1.29 acres, comprised of four (4) separate parcels of land in
Rosemount, Minnesota from the City of Rosemount.
Seller: City of Rosemount, Minnesota, or its ownership entity
Buyer: WS Midwest Enterprise, LLC, owner dba Culvers, or its assigns
Size: 56,192 square feet or 1.29 acres
Purchase Price:$275,000325,000
Closing Date: Within 10 days of the satisfaction of the contingencies
Earnest Money: $15,000 upon execution of the purchase agreement
Permittedroposed Use: The premises shall be used and occupied for the purpose of a drive thru
whose primary use is derived from the sale of custard/ice cream,
hamburgers, chicken, and fries.
Government
Approvals: Buyer shall have up to one hundred twenty (120) days from the execution of a
formal purchase agreement to apply for and obtain all necessary approvals for
Permitted Use. The City acknowledges that a Drive-thru use is not
currently permitted in the Downtown Zoning District and would prepare for
Council consideration an amendment to the zoning ordinance or prepare a
Planned Unit Development (PUD) concurrent to the Developers request for
approval.
Delivery Date: The Seller will deliver the site as is to Buyer ninety (90) days
.
Ms. Kim Lindquist
Page 2
Contingencies: From the receipt of an executed purchase agreement:
Thirty (30) days One hundred and twenty days (120) to confirm the property can
be utilized under City codes and ordinances for a fast food restaurant.
The Buyer shall have sixty (60) days from receipt to review all pertinent existing
files and reports including but not limited to acceptable site plan/location within
the development, title, soils, survey, site condition and environmental
information to be delivered to Buyer. In addition, Seller shall cooperate in
providing reasonable access to Buyer and its contractors for the purpose of
completing physical condition of the property and environmental inspections.
Ninety (90) days to obtain financing.
Culver Franchising System, Inc. to approve the property for Culvers use.
Buyer may choose to cancel this agreement at the end of each period with no
further obligation to Seller and be refunded its earnest money.
Items to be
Delivered to Buyer: Seller shall, within fifteen thirty (1530) days of signing a purchase agreement,
deliver to Buyer the following documents at its cost :
Title insurance commitment
Soil tests collected 01/10/2011
Phase I Environmental Report November 2005
Phase I Environmental Assessment Update June 2014
ALTA Survey
Seller to perform the following work prior to Buyer taking possession of the
subject property:
a.Obtain and record subdivision, lot split, lot tie or replat approvals for the
purchased parcel;
b.Demolish and remove all existing improvements, including foundations if
any, encroachments, signs and underground storage tanks, if any;
c. Extend utilities to the site t
the public right-of-way within 510feet of the property line;
d. Site shall be rough graded for pad ready development.
: Obtain and record subdivision, lot split, lot tie orreplat approvals for the
Formatted: Indent: Left: 0", Hanging: 1.44"
purchased parcels.
Easements: Seller will grant Buyer the following easements: Ingress/egress for drive thru,
utilities (storm water, sanitary sewer, drainage), cross-access, and parking if
required.
Ms. Kim Lindquist
Page 3
Project PUD: Please outline any additional costs relative to road infrastructure, snow removal,
landscaping, street lighting, the Buyer would be responsible for within the
development.
Exclusive Use:
successors or assigns shall not sell or lease property within the restricted area,
hamburgers or frozen ice cream/custartd/desserts/treats, and all sales contracts
prohibition which includes this la
twenty percent (20%) or greater derived from the use. Buyer shall be permitted
to record this prohibition.
Comment \[LK1\]:
The city does not own any
other land in that immediate area and does not
have the ability to restrict certain parcels land uses.
Closing Costs: Seller shall pay cost of the state deed tax, one half of the closingfeecosts, and
outstanding special assessments. Purchaser shall pay for one half of the closing
this instance.
fee costs and deed recording fee.
Commissions: Seller Buyer shall pay the cost of all sale commissions due to Diehl and Partners
LLC.
Commission per a separate agreement.
Purchase Agreement: This proposal is subject to the execution of a Purchase Agreement satisfactory
to both parties. Both parties mutually agree to use their best efforts to
negotiate and execute the Purchase Agreement within
Formatted: Indent: Left: 1.5"
fifteen (15) thirty (30)days of the
acceptance of this Offer to Purchase.
Non-Binding
Agreement: This is offer to Purchase and shall not be considered a binding agreement until
both parties have executed a binding Purchase Agreement.
This proposal covers the general business items at this time. If the above terms and conditions are
acceptable, please acknowledge your approval by signing this proposal below and returning one copy to
me. Thereafter, the parties will negotiate the terms and conditions of a mutually acceptable written
purchase agreement. This offer shall be good until 5:00pm on Wednesday, June 22, 2015. We look
forward to working with you. Thank you.
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Ms. Kim Lindquist
Page 4
Please contact me if you have any questions.
Yours Truly,
Lisa L. Diehl. CCIM, CPM
Diehl and Partners, LLC
Lisa.Diehl@CloseTheDiehl.com
5301 Ayrshire Boulevard
Edina, MN. 55436
(952) 285-5244 O
(612) 508-6410 C
cc. Maria Veach
SELLER: City of Rosemount BUYER: WS Midwest Enterprise, LLC
By: By:
Name: ________ Name: ___________________________
Title: ________ Title:_____________________________
Date:____________________________ Date:_____________________________