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Forest Lake approves right-of-refusal and option agreement with developer for two Airport Business Park parcels
Summary
Council approved a first right of refusal for the southern parcel and an option agreement for the northern parcel at the Airport Business Park with Gaughn (record shows variant spellings) Development; the option includes a $15,000 option fee, a listed purchase price of $353,500 in staff materials, a minimum 30,000-square-foot development expectation, and a deed reversion clause if development commitments are not met.
Forest Lake City Council approved two land agreements with a private developer for city-owned parcels in the Airport Business Park, moves city staff said are intended to preserve planning flexibility while allowing an interested developer time to formalize plans.
City staff member Abby explained the city owns two parcels along Fenway Avenue and has held long-term negotiations with the developer (appearing in the record under variant spellings including "Gunn," "Gon," and "Gaughn"). For the southern parcel, staff recommended entering a first right of refusal that would allow the developer to match any bona fide offer received while the city pursues small-area planning with neighbors and stakeholders.
For the northern parcel, staff presented an option agreement that gives the developer one year — in exchange for an option fee stated in staff materials as $15,000 — to market the property for industrial, business service, office or commercial recreation uses and to negotiate a purchase. Abby said the staff memo lists a purchase price of $353,500 and calls for the developer to design and plan a minimum 30,000-square-foot structure; the memo also references a finished valuation figure listed as "$1.73 a square foot" in the staff materials. The option agreement would include a deed restriction enabling reversion of the property to the city if the developer fails to meet negotiated development milestones.
Council member S7 moved approval of both the first right of refusal for Lot 1 Block 1 and the option agreement for Lot 1 Block 2; both motions were seconded and carried unanimously.
Abby characterized the approach as protective of the city's planning interests while allowing time to work with adjacent landowners and to promote potential commercial development. The council did not discuss specific tenants or binding timelines beyond the contract provisions the staff laid out.
Next steps: staff will proceed to finalize the executed agreements with the developer and continue neighborhood planning work around the Airport Business Park parcels.
