HomeMy WebLinkAbout20190423 - HEDRA Minutes
Hastings Economic Development and
Redevelopment Authority
To: HEDRA Commissioners
From: John Hinzman, Community Development Director
Date: May 9, 2019
Item: Authorize Amendment to Real Estate Option Agreement – Rungoli (Panache)
ACTION REQUESTED
Authorize signature of the following amendment to the Real Estate Option Agreement between
HEDRA and Rungoli (Panache) for sale of the 1.49 acre parcel located north of Artspace:
1) Extend the termination date for the Option Agreement from June 1, 2019 to October 31,
2019.
2) Establish a purchase price of $470,700 ($7.23 per s.f.) for the property. HEDRA may
consider a reduction of the purchase price upon demonstration from the developer that
a specified lower price is needed to make the project financially feasible. To
demonstrate financial feasibility and the related lower price, the Developer must
provide the following information on or before September 30, 2019:
a) Sources and uses of funds for the Project. Sources will include debt (with terms) and
equity (with source of equity). Uses must detail land, design, construction, FFE and
startup costs. Include documentation for estimated costs.
b) Bank commitment. Letter from bank giving preliminary loan commitment.
c) Project Proforma. The proforma will include projected operating revenues and
expenditures for the years 2020 through 2029. The assumptions used in estimated
operating revenues must be included.
BACKGROUND
On December 12, 2018 HEDRA authorized signature of the Real Estate Option Agreement with
Rungoli, LLC. Panache plans to construct a three story, 2,400 s.f. mixed use structure containing
an artisanal cider bar, and possible restaurant, office, and housing. The Agreement established
the following:
Provides Rungoli LLC (Panache’s Property Company) until June 1, 2019 to exercise the
Option to develop the property.
Rungoli is required to notify HEDRA if it intends to exercise the Option granted. Upon
receipt of the notice both HEDRA and Panache would have up to 60 days to come to
agreement on the purchase price of the property.
The sales price would then be incorporated into a future Purchase Agreement for sale of
the property; with sale occurring no earlier than 30 days nor more than one year front
date of the Option Agreement.
The Option Agreement would terminate if an agreement to sales price is not achieved
within 60 days of notice to exercise the option or upon Option termination date of June
1, 2019.
HEDRA would provide an Abstract of Title certified to date or a commitment for an
owner’s policy of title insurance for Panache’s review.
Rungoli’s Commitment to provide $1,000 in earnest funding under the Letter of Intent
would be incorporated into payment for the Option.
PANACHE APPLE
Panache LLC is a local, majority women owned, CERT certified small business, committed to
building an environmentally and economically sustainable local community. Panache started
with of a love of apples and a desire to reintroduce heirloom apples in our daily consumption.
Heirloom apples, passed down for centuries by family farms, come with a deep history of hand
crafted artisanal practices creating time honored quality products. Hard ciders, botanically
infused apple juices and caramels, jams, fruit compotes are some of these quality products.
Panache LLC will be producing these products for the regional market on the lot within the
Industrial Park. Further information can be found at www.Panacheapple.com.
ATTACHMENTS
Location Map
Concept Plan
Real Estate Option Agreement
LOCATION MAP
DOWNTOWN SITE