60° and Sunny
Image
Plans for a grocery store on Seventh Avenue in Anoka have been put on hold, with the unidentified grocer delaying construction up to two years. A special meeting will be held Thursday, May 18, to determine the future of the project.
Ryan Companies, the development company working with the Anoka City Council on behalf of the unnamed grocer, was represented by Vice President of Retail Real Estate Development Patrick Daly at a May 15 work session that was specially scheduled by Anoka.
“Given the current economy, interest rates and vulnerability … (the grocer) needs to delay construction 12 to 24 months,” Daly told the council. “It would be a shame (to cancel the project) given all the work that’s gone into it. … Trust me when I say this is a huge disappointment to myself, my team and the tenant.”
Under the current contract, Ryan is required to provide $25,000 of earnest funds, due on May 18, which are non-refundable and will go toward the project. This will give them a 90-day extension on finalizing the project documents, with an option for 90 more days if $25,000 more is deposited. That would be a maximum of six months extension.
“What happens if the council decides to hit the reset button after six months?” Council Member Jeff Weaver asked. “Inflation isn’t going to go down. What would we be bound by if this council decided not to move forward?”
Staff responded that due diligence legally provides the buyer of the land the right to extend the deadline with earnest funds. Construction would need to commence by November 2023, which would not be possible given the grocer’s delay.
“We would need to start construction as per the agreement,” Daly said. “If not, you would be able to buy it back at the same price. … Under our current arrangement, we already know we can’t start construction in six months. That puts us in a really awkward position of going in with non-refundable earnest money and knowing we can’t start this project.”
Council Member Brian Wesp brought up the subject of land cost, which the city has held at the 2020 value of $2 million despite property value increases. Wesp said they did so because of the pandemic, but this situation is now due to the grocer and not world events.
“We’ve seen the value increase significantly,” Wesp said. “Maybe it’s worthwhile exploring what the property could look like if we didn’t move forward with this project?”
Daly was receptive to talking about the price and hoped that the conversation could continue before any decisions were made.
“If revising the price is part of that decision, I’d be happy to leave with that today rather than pencils down,” Daly said. “This is a tough spot for all of us to be in, and I don’t expect to solve it tonight. … I had to deliver this message as quickly as possible. Ideally, I would like to continue the conversation.”
In order to come to an agreement before the first round of earnest money is due, the Anoka City Council scheduled a special meeting for 7 p.m. on Thursday, May 18. The agenda includes a potential fourth amendment to the purchase agreement to give Ryan Companies and their client more time to provide funds and start construction. This meeting was not conducted before press time on May 17.
“This is worse than the 11th hour,” Anoka Mayor Phil Rice said. “We’re squirming to get this meeting in, but my direction is to post the meeting.”
City meetings require 72 hours of notice before taking place, meaning the decision had to be made that night in order for Thursday evening to legally qualify as a city meeting.
“I’m supportive of that, but to me that’s really the end,” Council Member Erik Skogquist said. “I’m done working with what is at least this current iteration.”
SOURCE: Hometown Source
