2015-02-17 CC Agenda Packetlberty� ij� Mayor and Council Request for Action
February 12, 2015
SUBJECT: LEGAL —ADVERTISEMENT FOR BIDS FOR THE SALE OF TWO PRAIRIE RUN LOTS
OWNED BY THE CITY
RECOMMENDATION: It is respectfully requested that the Mayor and Council consider the
following:
MOTION TO: Advertise for bids for the sale of Lots 35 and 37, Block 2, Prairie Run consistent
with the attached advertisement.
BACKGROUND: In August 2014, the City received deeds from the State of Minnesota to 17
residential properties in Prairie Run. Two of these properties are regular -sized cul-de-sac lots,
while the other 15 are small detached townhome lots. Staff believes that the 15 townhome lots
will likely sell to one builder, perhaps after Fieldstone Family Homes sells most of the 10
townhome lots it is already under contract to buy from the City. The two cul-de-sac lots can be
sold separately or together, either to individuals or to builders. The two cul-de-sac lots are valued
for tax assessment purposes at $35,000 each.
Staff would like to put the two cul-de-sac lots up for sale via sealed bids in March 2015. The
City has a list of four people who have expressed interest in the lots. These people would be
contacted, as would several of the builders in the neighborhood, and be informed of the sealed
bid process. Additionally, an ad would be laced in the newspaper about 15 days before bid
opening, which would occur on March 10 .
The proceeds of the sale would be applied to the unpaid special assessments that remain
outstanding from this project.
KEY ISSUES:
• The City acquired these properties for $5,000 each from the State after the properties
went tax forfeit.
• All proceeds of the sale will reduce the deficit in the Prairie Run project fund.
• Staff recommends the City set a minimum bid price in the ad.
• The City can reject all bids if it does not like the bids it receives.
POLICYIPRACTICES CONSIDERATIONS: While the City is not required to advertise for
the sale of land, City staff believes advertising for bids is the best method available to maximize
the amount the City will realize from the sale and provide the fairest sale method in the eyes of
the public.
FINANCIAL CONSIDERATIONS: The ultimate plan is to sell all 27 Prairie Run lots the City
owns and apply all proceeds to the delinquent special assessments attributable to these
M:1Public DatalCity CouncillCouncil Packet information12015102171512015-02-17 Sale of Prairie Run lots.doc
Meeting Date: February 17, 2015
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Mayor and Council Request for Action — February 17, 2015
Advertisement for Bids for Prairie Run Lots Page 2 of 2
properties. City staff hopes that the City will break even on the development when all lots are
sold, but given the litigation expenses the City incurred defending against Gold Key's lawsuit
several years ago, this may not be possible.
LEGAL CONSIDERATIONS: The City can sell these lots by any method it believes best.
However, once it advertises for bids, the City must either accept the high bid for each lot or
reject all bids for that lot. It will not be able to sell the lot to anyone other than the high bidder
unless it goes through an entirely new sale process.
Responsible Person/Department/: Mike Couri, City Attorney
Tina Lannes, Finance Director
Submitted Through: Adam Nafstad, City Administrator-PWD
Attachments: Proposed advertisement for bids
M:1Public DatalCity CouncillCouncil Packet information12015102171512015-02-17 Sale of Prairie Run lots.doc
Meeting Date: February 17, 2015
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REQUEST FOR SEALED BIDS FOR
SALE OF RESIDENTIAL LOTS IN THE CITY OF ALBERTVILLE
The City of Albertville owns two vacant residentially -zoned lots known as Lot 35, Block
2 and Lot 37, Block 2, Prairie Run, Albertville, Minnesota. The Albertville City Council
will be accepting sealed bids through 5:00 p.m. on March 10, 2015 for the sale of each
lot. All bids must be received at the Albertville City Hall, 5959 Main Avenue NE,
Albertville, Minnesota by 2:00 p.m. on March 10, 2015, at which time all bids shall be
opened. All bids must be in a sealed envelope and be clearly marked with "Prairie Run
lot bid" on the outside. Each bid shall specify a price for each individual lot that the
bidder intends to bid on. Bidders may bid on one or both lots.
The City reserves the right to reject any or all bids for any reason. No bid less than
$ will be accepted for either lot. The successful bidder(s) will be required to
enter into a purchase agreement, the form of which is available for inspection at City
Hall. All bids must be accompanied by a check made payable to the City of Albertville
in the amount of 5% of the bid amount, which shall become the earnest money required
by the purchase agreement. The earnest money checks of all unsuccessful bidders shall
be returned to such bidders.
Agenda Page 17