7. EDSR 08-14-2006ITEM N 7.
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MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Development//f
DATE: August 14, 2006 (/,~"~
SUBJECT: Discuss Purchase Option Policy for Northstar Business Park
Attachment
• Northstar Business Park map
Background
The EDA opened Notthstax Business Paxk for development a year ago adding the necessary
infrastructure and pre-selling 3 out of the 6 lots.
Three lots remain available fox sale in Noxthstax Business Paxk, including:
Lot 1, Block 1 13.11 acres (8.88 developable acres, divided by gas line)
Lot 4, Block 1 9.29 acres
Lot 1, Block 2 4.34 acres
Issue
Staff has recently received inquiries from a couple local manufacturers that have indicated a
need to expand and relocate from their existing landlocked situations and have room to
construct facilities between 60,000 to 125,000 square feet; one being ready to construct in
the next 12 months, and the other in the next 24 months. Typically buildings of this large
size require approximately 6 to 10+ acres to accommodate building and required parking.
Only one lot in Noxthstar Business Paxk would accommodate the proposed project size -
the 9.29 acre Lot 4, Block 1. Outside of the city-owned business park, the approximately 18-
acxes of Sandpiper Business Park, located between Faribault Foods and the County
Government Centex on Business Centex Drive, is the only privately-owned property that
would accommodate the proposed project size.
The manufacturers have indicated an interest in securing the 9.29 acre Noxthstax Business
Park lot under a purchase option arrangement.
s:\EDA\Indusnial Land\Northstar Business Park\Memos\8.14.06 eda memo.doc
Discuss Purchase Option Policy for Northstar Business Park
August 14, 2006 EDA Meeting
Page 2 of 2
Issues for Discussion
Following is a list of issues fox discussion:
• Opportunity lost cost. Staff continues to receive inquiries for this sized parcel with
projects that axe immediately ready to build. If the EDA chooses to giant a purchase
option on the property there is risk of having lost several opportunities fox
development if the company does not exercise the option at the end of the term.
• If the EDA chooses to exercise and option agreement what would be the conditions?
i.e. maximum time to hold property, downpayment amount, refundable ox not,
assignable, etc.
Does the EDA want to require a site plan and building elevation prior to execution of
a purchase option?
Action Requested
Staff requests the EDA discussion and direction as to whether ox not the EDA would be
willing to consider exercising a purchase option on the Northstar Business Paxk property.
S:\EDA\Indushial Land\Northstar Business Park\Memos\8.14.06 eda memo.doc
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