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Council amends sale agreement for 2023 Washington Street with conditions; retains right of first refusal
Summary
Council approved an amendment to the sale agreement with Y Knot LLC for 2023 Washington Street that allows the developer more time to sell or redevelop the parcel and permits the developer to recoup certain documented costs if the property is sold; council required remaining invoices and limited prior‑date expenditures as conditions.
The Two Rivers City Council voted to amend a 2020 sale agreement for the vacant property at 2023 Washington Street, authorizing a revised timetable and a limited reimbursement arrangement while preserving a city right of first refusal.
Greg (staff member) reviewed the property’s background, noting the city acquired foreclosure rights in 2020 under a DNR agreement that provides liability exemptions for local governments handling brownfield sites. He said the original sale agreement required the buyer to submit a commercial redevelopment plan and make at least $100,000 in qualifying investment by a city deadline; that deadline had been extended twice and the buyer now asked for additional accommodation.
Under the amendment approved by council, the buyer, Y Knot LLC, may list the property for sale and, if it sells, may recoup documented expenses up to $49,816.71 (as submitted by the developer) plus recoup the $10,000 purchase price as part of sale proceeds, subject to the agreement terms. Any sale proceeds above that amount would be split with the city at a 2:1 ratio (two dollars to the city for every dollar retained by the developer). The amendment also includes a right of first refusal in the city’s favor: the city must be notified of any proposed sale and will have 10 days to match the offer; if the property remains unsold through 2025, the city would have an option to purchase in January 2026.
Council members sought documentation and limits before approving. The council required confirmation that any design or consulting costs submitted as eligible expenses were incurred on or after Feb. 7, 2022 (the date council approved the original sale agreement), and requested two outstanding invoices and any missing backup for invoices already submitted. City Attorney Andrew (City Attorney) and staff clarified changes to Exhibit B, the right of first refusal, to specify response windows and the city’s repurchase rights.
Council member Tim Petrie moved to approve the amendment with the contingencies that staff verify that no billed design costs predated Feb. 7, 2022, that the two missing invoices be provided for review, and that the revised right‑of‑first‑refusal language be included; Bill LeClere seconded. The motion passed on a roll‑call vote with all members present voting yes.
Greg said the city retains authority under the original agreement to require payment of the difference if the investment requirement is not met, including taking the property back, but council members agreed to the more flexible amendment intended to encourage sale or redevelopment.
The amendment will be contingent on submission of the requested documentation and the finalized Exhibit B language; staff will return materials for council record as appropriate.
