McDonald’s has officially dropped its plan to build a new restaurant on a property off Armstrong Boulevard and north of Highway 10.
After the Ramsey City Council said it would seek Anoka County District Court action to take back the property the city sold to McDonald’s for $470,000 in February 2014, McDonald’s came forward with a proposal that the council found acceptable.
McDonald’s will still lose almost all of the $470,000 it paid the city three-and-a-half years ago, but it will receive a payment of $10,000 from the city of Ramsey. In exchange, both sides said they will not seek any future court actions on this matter.
The council unanimously adopted the settlement agreement at its Aug. 22 workshop, closing a chapter on a story that was running on five years time when dating back to the Ramsey Housing and Redevelopment Authority agreeing to sell the land back in October 2012. It took more than a year just to get to the property closing and the Ramsey council grew frustrated to have a prime piece of real estate sitting vacant with McDonald’s failing to meet the deadlines it had agreed to in its purchase agreement.
City Administrator Kurt Ulrich had said the city had a strong case, but there was always a possibility that McDonald’s could have fought to get all or some of its $470,000 back.
In the end, the council said through its actions earlier this year that it wants to do more than sell property to get it back on the tax rolls. It wants to see these properties built on and not just held onto for speculative development, said Mayor Sarah Strommen.
“This has been a thoroughly disappointing and frustrating experience,” Strommen said. “I believe I speak for all of us when I say we will be happy to have this resolved and move on,” Strommen said.
The 1.36-acre parcel on the southeast corner of Armstrong Boulevard and Sunwood Drive can now be combined with two similar size neighboring properties the city of Ramsey is already marketing. These two other sites were once considered for a SuperAmerica convenience store and Wiser Choice Liquor, which needed to move from its old spot near this location because of its land was needed for the Armstrong Boulevard interchange project.
The city of Ramsey spent about $300,000 for street, sewer, water and storm water improvements on these three properties. Ramsey had also paid $30,000 to Ramsey’s broker (Welsh Companies). The city’s land broker was Landform, which at the time of the purchase agreement in October 2012 was also receiving $15,000 per month from the city because Landform President Darren Lazan was serving as the city’s development manager. For the McDonald’s agreement, Landform ultimately received about $41,000. Landform will not receive its full commission that could have been $51,000 because McDonald’s never opened.
Ulrich said settling with McDonald’s for $10,000 is a good outcome for the city of Ramsey at this point in time.
“We’re happy to settle it at this amount,” he said. “More importantly, it allows us to move forward as a city and acquire the property immediately and not wait 6 to 12 months or two years or whatever it would take to acquire this property through litigation.”