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    4. 2.    
Economic Development Authority (EDA)
Meeting Date: 09/14/2017  
Submitted For: Patrick Brama, Administrative Services
By: Patrick Brama, Administrative Services

Title:
Inland Group Purchase Agreement
Purpose/Background:
Inland Group (http://inlandconstruction.com/) is a development company based out of Washington.  One of their subsidiaries is Affinity Living Communities (http://affinityforliving.com/).  Affinity specializes in senior, independent living, market rate, multi-unit, apartment projects.  Inland Group (Affinity) is interested in a 175-unit project in The COR, located on 3-5 acres of city-owned land. 


PURPOSE
The purpose of this case is to consider the attached purchase agreement.


PROCESS
(1) Site Selection, August 2017 (completed)
(2) Purchase Agreement, September/ October 2017 (this step)
(3) Bolton & Menk Infrastructure Analysis November 2017
(4) Entitlement Process, January--April 2018
(5) Construction, 2018/2019

We are currently on Step 2.  Please see September EDA/ Planning Commission/ and September 22 City Council meeting for details on site selection, including the five alternatives that were originally considered.  Summarizing input from all boards and the developer in September, it generally appears Concept Layout C (attached) is the most desired site layout.  The attached purchase agreement generally reflects Concept Layout C. 

 
Notes RE the Concept Site Layouts
Concept layouts were drafted by staff, not the developer.  The purpose of the initial concept layouts was to identify site location options for the developer and to create context for a discussion RE this proposed project.  The purpose of the initial concept layout options was not for Inland (or the city) to commit to a specific detailed design/ layout.

Moving forward, Inland will be taking over the process of laying out sites.  It is likely the layout Inland creates will have differences from what staff had originally drafted (number of parking stalls, number of units, layout of building, location of amenities, location of access points, etc.).  What will remain the same is the site location, proposed use, and general orientation.

Lastly, the purpose of the city developing site concept layouts is also to show an 'example' of how adjacent/ remnant parcels could layout.  The purpose of the exercise is not to decide on, or lock in, a specific layout for adjacent/ remnant parcels.  The actual use and layout of adjacent/ remnant parcels will be determined on a case-by-case basis, in the future, and will be measured against the city's zoning code, vision for The COR, and policy position of the City Council (as we are property owner); and will also be driven by market factors.

 


 
Notification:
Observations/Alternatives:
PROJECT SPECS
  • Inland Group (http://inlandconstruction.com/) is a development company based out of Washington. 
  • One of their subsidiaries is Affinity Living Communities (http://affinityforliving.com/). 
  • Senior, independent, 55+ (not assisted living)
  • Estimated 150-200 units (may be adjusted)
  • Market rate, high amenity (not low income)
  • Anticipate a 4-5 story building
  • Anticipate 1st floor structured parking (100%)
  • Want roughly 1.3-1.5 parking stalls per unit (may be adjusted)
  • Not willing to use a shared parking ramp (non-starter item)
  • Opposed to any commercial/ retail (but, open to discuss if required by City)
  • Desire a spring 2018 construction
  • Need 3-5 acres
  • No assistance requested at this time (however, this project will likely trigger construction of public infrastructure, which will require city participation).

PURCHASE AGREEMENT
The attached purchase agreement was modeled after the City's template purchase agreement and policy for selling city owned land.  Below is a summary of major deal points (often times called a term sheet).  It should be noted, staff is still working out some final details with the developer.  This case may be updated on 09/13.
 
(A) Purchase Price: $4.00 psf (4.2 acres = $731,808).  This is the city's stated asking/ listing price.
 
(B) Earnest Money: $25,000, non-refundable after Notice-to-Proceed (04/01/2018).
 
(C) Term: Inspection Period ends (04/01/2018), Closing 30 days after, can extend 2x for 60 days at a cost of $10,000 each time.

(D) Construction Deadline: Building permit 6 months after Closing and Certificate of Occupancy 2 years after Closing.  Includes right of re-entry agreement.

(E) Platting/ Development Agreement: must obtain plat, development agreement, site plan, and approved visual renderings before closing on purchase.

(F) Road Connections: use the city's past practice model (60% city and 40% developer).  Because the developer is only using one side of many roads, they would only pay 20% of said costs.  This is consistent with several recent projects.  At this point, the cost/ scope of road improvements required isn't known.  Within this specific case write-up, staff is also requesting the city complete the attached preliminary feasibility report for infrastructure needed adjacent/ near this proposed project.  This report will help the city understand the scope of improvements needed and the associated estimated costs.

Funding Source:
NA
Recommendation:
  • Staff believes the proposed project meets the general direction provided by the EDA, PC and Council in September--in terms of site location and proposed use.
  • Staff believes the attached PA is generally consistent with city's polices for selling city owned land and is comfortable with the asking price.  Staff is not requesting to go into closed session.
  • Staff would note: that city staff (and attorney) are still finalizing some details in the PA with the developer.  The attached PA may be updated before the EDA meeting.  It is possible that staff and the developer don't come to an agreement on a few remaining items--in which case, staff will make notification at the EDA meeting. 
  • Lastly, staff would recommend completing the attached Bolton & Menk work order (concept level feasibility report for nearby infrastructure).  This work will keep the project moving forward, and give both parties a better idea what costs should be expected, for a cost-share, for public infrastructure that will be needed as a result of this project.
Action:
Motion to recommend the City Council:
Approve the attached purchase agreement with CAP Acquisitions LLC for roughly 4.2 acres of city owned land.

-and-

Authorize the attached Bolton & Menk work order.

Attachments
Concept Layout C
PA (draft)
Inland Presentation
Bolton and Menk Work Order

Form Review
Inbox Reviewed By Date
Kurt Ulrich Kathy Schmitz 09/11/2017 09:24 AM
Form Started By: Patrick Brama Started On: 09/08/2017 01:41 PM
Final Approval Date: 09/11/2017

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