Approval of a purchase agreement for the sale of city-owned property at 3615 Victoria Street (former Fire Station 140) and authorizing its execution with 44 Investment Company
To approve the real estate sale contract (purchase agreement) for the sale of city-owned property at 3615 Victoria Street (former Fire Station 140) and authorizing its execution with the buyer (44 Investment Company - doing business as Mi-Sant restaurant), subject to minor revisions approved by the city attorney.
Staff is pleased to announce that a deal has been agreed to (pending city council approval) for the sale of the city-owned property at 3615 Victoria Street to 44 Investment Company (doing business as Mi-Sant, a cafe and bakery).
Mi-Sant proposes to use the property for a mini-Vietnamese bakery and fast-casual restaurant serving French baguettes and buttery croissants, along with noodle bowls, spring rolls, and bubble teas. There would be both indoor and outdoor cafe style seating, and a group dining/meeting room. The planned use for the majority of the building will be part of their test kitchen. Mi-Sant currently has two locations in Brooklyn Park and Roseville, with another planned for Saint Louis Park.
Presented to the city council for review and approval is a real estate contract ("purchase agreement"), which outlines the terms of the property transaction.
The property is the former Fire Station No. 140 building that was vacated in July of this year with the move of the Lake Johanna Fire Department to a new headquarters facility in Arden Hills.
After publicly listing the property for sale, the city received considerable interest and several formal purchase offers were submitted. Two of the parties that submitted offers presented their plans at a closed joint meeting of the city council and economic development authority. A preferred offer proposal was identified and staff was directed to move forward with negotiating a purchase agreement.
Background
The city engaged the services of the professional real estate consulting firm IAG Commercial to assist in the process for envisioning preferred uses for the property and market its sale. IAG facilitated a series of stakeholder meetings involving council and EDA members, small business owners, commercial and housing developers, and representatives from nearby corporations and multifamily properties. The process culminated with a written report summarizing their observations from the stakeholder groups, interpreting the feedback received, and providing the possibilities for the site.
In general, the city council and economic development authority reached strong consensus that this property could be better repurposed for a use that would be of greater benefit as a destination/attraction for the community. The city has a special opportunity to explore exciting and creative uses that takes advantage of the location adjacent to the beautiful lake and county park, the Seven Lakes project becoming a major job center that will have upwards of a 1,000 employees, and the hundreds of apartments with plans to double in size over the next decade or so. Additionally, the site is easily accessible from all areas including the interstate, and is situated away from the Lexington Avenue corridor in an area not served by commercial retail.
With the findings of stakeholder groups report, the city council and economic development authority worked with IAG to define the target buyer by agreeing on the "brackets" of potential users (setting general parameters) on what would be the most desirable use of the property and what would be acceptable uses.
IAG also provide their professional opinion of the market value of the unique property, with the sale price established at $1,350,000. A property listing agreement was executed with IAG to coordinate the marketing and sale of the site on behalf of the city.
In a relatively short period from when the property was listed on the market, there was tremendous interest in the property from a wide-range of businesses and developers, with many showings of the property.
After establishing a deadline for submittals of proposals, the city received 3 formal purchase offers. One party withdrew their offer after informing us that their corporate leadership felt the property, while attractive, did not meet their size requirements. The remaining two parties were invited to attend the special closed session meeting of the city council and EDA on August 6th to present their proposals. After hearing from both interested parties, the council and EDA board members reached a consensus on a preferred proposal that they felt best met the asking price and vision for the property.
Purchase Agreement
Over the past month, city staff and IAG have been working closing with the city attorney's office and the buyer on terms and conditions of a purchase agreement. Chad Lemmons, from Kelly & Lemmons representing the city, prepared a formal real estate sale contract that is being presented for council approval.
Attached with this memorandum is the real estate sale contract (purchase agreement) that has been agreed to by the buyer. Also included is a summary of the terms.
Some of the key terms of the purchase agreement are as follows:
Once the purchase agreement is executed between the parties, the buyer will need to prepare plans and submit applications to go through the entitlement approval process with the city. Closing the property transaction would not occur until the buyer receives necessary approvals. The property requires a land use change as an amendment to the comprehensive plan and a rezoning of the property. It is proposed that the property be zoned to planned unit development so there will be conditions recorded limiting the use of the property beyond what is proposed by the buyer. Any future deviation from the allowed uses would require additional city approval.
Staff recommends that the city council approve the real estate sale contract (purchase agreement) for the sale of city-owned property at 3615 Victoria Street (former Fire Station 140) and authorizing its execution with the buyer (44 Investment Company - doing business as Mi-Sant restaurant), subject to minor revisions approved by the city attorney.