HomeMy WebLinkAboutItem 17 Discussion of an Unsolicited Offer from VMG to Develop a Two-Story Commercial Building on City-Owned Property Located at 2 North Bluford Ocoee
florida
AGENDA ITEM COVER SHEET
Meeting Date: March 5, 2019
Item # /7
Reviewed By:
Contact Name: Craig Shadrix Department Director:
Contact Number: 407-905-3111 City Manager: Robert Fra
*Med: Discussion of an unsolicited offer from VMG to develop a two story commercial building on
city-owned property located at 2 North Bluford
Background Summary:
During strategic planning exercises with the City Commission almost four years ago, the City
Commission harmoniously directed staff to pursue a plan to revitalize and redevelop the area historically
referred to as downtown. Since that time, the City adopted a downtown masterplan and secured funding
for the projects deemed crucial in the master plan, all while lowering taxes. The downtown master plan
projects are well under way, with Bluford Avenue nearing completion, the Lakeshore Center expansion
nearing completion, and several streets, the lakefront park, and a new City Hall under design.
With the initial phases of the downtown revitalization effort underway, attention must be given to
economic development efforts to bring additional businesses and consumers to the downtown area.
During February, the City Commission officially rescinded its consideration of city-owned property
located at 2 North Bluford for an unsolicited bed and breakfast proposal. During recent weeks, another
unsolicited proposal has presented an opportunity for the City Commission to consider.
Staff has created a vision for the property at 2 North Bluford, including color renderings (see attached),
that is compatible and representative of good economic development of downtown parcels—new
construction. During a recent meeting with VMG Construction Inc. regarding a different project, their
representatives offered to build the City's rendered plan in exchange for the property located at 2 North
Bluford. The City's plan includes a commercial building that would include restaurant and office space,
and would cost a developer approximately $4 to 5 million to construct.
Following VMG's offer, the City Attorney prepared a letter of intent outlining the basic terms of an
agreement for them to construct the building as illustrated and receive the title to the property upon
issuance of a certificate of occupancy (attached). The City would reserve the right to maintain any
necessary easements on the property as part of this transaction. During the previous commission
meeting, the City Commission authorized expenditure of City funds to demolish the existing structure on
the property following the expiration of its use as a staging facility for Oelrich Construction for the Bluford
Avenue Streetscape Project.
1
Issue:
Should the City Commission authorize City staff to proceed with an agreement consistent with this attachE
letter of intent that transfers title of city-owned property to VMG construction upon their completion of tf•
building shown in the attached building illustrations?
Recommendations
Staff recommends that the City Commission authorize City staff to proceed with an agreement consiste
with this attached letter of intent that transfers title of city-owned property to VMG construction upon the
completion of the building shown in the attached building illustrations.
Attachments:
LOI from VMG Construction, Inc.
Illustrations of proposed building
Financial Impact:
The property was purchased with utilities funding in 2017 for $344,350. Upon transfer of the title, the Ci
would need to reimburse the utilities fund. Adequate funds are available to make the reimbursement.
Type of Item: (please mark with an"x")
Public Hearing For Clerk's Dept Use:
Ordinance First Reading Consent Agenda
Ordinance Second Reading Public Hearing
Resolution Regular Agenda
X Commission Approval
Discussion&Direction
Original Document/Contract Attached for Execution by City Clerk
Original Document/Contract Held by Department for Execution
Reviewed by City Attorney N/A
Reviewed by Finance Dept. N/A
Reviewed by
N/A
Reviewed by N/A
2
Authentisign ID:33E30D55-B95E-4317-B1CA-EC5E22D23488
VMG
CONSTRUCTION INC.
TILT WALLS -C.I.P. -SLABS
February Z, 2019
Rob Frank
City of Ocoee
150 N Lakewood Ave.
Ocoee, FL 34761
RE: Development and Conveyance of Property at 2 N Bluford Ave., Ocoee FL 34761
Dear Mr. Frank:
This Letter of Intent (the "LOI") outlines the basic terms upon which VMG Investments, Inc., is
hereby offering to develop the Property described herein.
Upon mutual execution of this LOI, a formal Agreement between Developer and the City shall
be drafted by the City incorporating the terms and conditions specified herein, plus any other
terms and conditions that are mutually agreeable to the parties.
1. PROPERTY: 2 N Bluford Ave., Ocoee, Florida 34761 (Parcel ID: 17-22-28-6144-03-
221)
2. DEVELOPER: VMG Investments, Inc., a Florida corporation.
3. DEMOLITION OF EXISTING BUILDING: The City, at City's expense, will
demolish the existing building on the Property and remove the debris from the Property.
4. DEVELOPMENT OF THE PROPERTY: Following the demolition of the building as
described above, the City will grant the Developer a license and easement to enter onto
the Property and develop the Property consistent with the plans attached hereto as
Exhibit"A" (the "Development Plans"). The parties acknowledge that development of
the Property consistent with the Development Plans is material to this transaction and any
deviations from such plans shall be subject to the prior review and approval of the City.
All of the permitting, entitlement, planning, engineering and construction and
development costs and expenses shall be borne by the Developer. The Developer shall
obtain appropriate insurance relating to the development activities and name the City as
an additional insured. Developer shall indemnify, defend and hold the City harmless
relating to claims arising in connection with Developer's inspections of, entry onto and
development of the Property. The permitting and entitlement process shall follow the
City of Ocoee's standard procedures.
5. CONVEYANCE OF PROPERTY: In exchange for and conditioned upon the
Developer's development of the Property consistent with the Development Plans and the
Authentisign ID:33E30055•B95E-4317-B1CA•EC5E22D23468
VMG
CONSTRUCTION INC.
TILT WALLS -C.I.P. -SLABS
Developer's receipt of a certificate of completion, the City will convey fee simple title to
the Property by Special Warranty Deed and Bill of Sale to the Developer for$100. With
the conveyance of the Property, the City will reserve all easements necessary to continue
to use and maintain utility facilities within the Property.
6. TITLE COMMITMENT AND SURVEY: At the City's expense, the City shall obtain
an ALTA title insurance commitment to be issued within twenty (20) days of full
execution of the Agreement and upon conveyance of the Property a final owner's title
insurance policy based on the then value of the Property. Developer, at Developer's
expense, may obtain a boundary survey of the Property prior to the expiration of the
Inspection Period. Any objection to the condition of the title or survey shall be made in
writing within ten(10) business days following receipt of the later of title commitment or
survey,but in all events prior to the expiration of the Inspection Period.
7. INSPECTION PERIOD: Developer shall be allowed sixty(60) days from execution of
the Agreement (the "Inspection Period") in which to inspect the Property, and to
conduct any engineering, environmental, feasibility and/or other studies. If Developer, in
its sole discretion, determines that the Property is not suitable for Developer's needs, then
Developer may terminate the Agreement by delivering a written termination notice to the
City prior to the expiration of the Inspection Period.
8. CLOSING COSTS: Developer shall, at closing, pay all real property transfer and
transaction taxes and levies relating to the Property including, without limitation, (i) the
documentary stamps which shall be affixed to the deed, (ii) the title insurance premiums
and costs relating to the issuance of the Title Policy, (iii) the cost of the survey, (iv) any
due diligence expenses incurred by Developer, (v) all permitting, entitlement, planning,
engineering and construction and development costs and expenses, (vi) any lender fees,
including fees charged by the lender for endorsements and a mortgagee title insurance
policy, (viii) any broker or salesperson commissions payable, and (ix) the cost of
recording the deed. Each party shall pay its own attorney's fees and costs.
9. DEFAULT: In the event the City defaults under the Agreement, Developer shall be
entitled to terminate the Agreement or bring an action for specific performance. In the
event the Developer defaults under the Agreement, the City shall be entitled to terminate
the Agreement and in such event Developer shall assign all plans and approvals to the
City and convey any improvements then on the Property to the City by Bill of Sale.
10. ASSIGNMENT: Developer may not assign the Agreement without the prior consent of
the City.
11. REAL ESTATE COMIVIISSION: The City has not engaged a real estate salesperson or
broker in connection with this transaction.
12. INTENT AND PURPOSE: It is expressly understood and agreed by all parties that this
AuthentisignID:33E30055.895E-4317-B1CA-EC5E22D23468
VMG
CONSTRUCTION INC.
TILT WALLS-C.I.P. -SLABS
letter is intended only as a summary of certain terms and conditions being discussed
between the parties hereto with respect to the development and conveyance of the
Property and in no event shall this letter be construed as a binding agreement enforceable
against either party. All terms and conditions set forth in this letter are subject to further
review and approval by and between the City and the Developer.
The parties hereby covenant and agree that the purpose of this letter is not to be construed as a
contract or any other type of agreement, other than to outline the basic terms and provisions upon
which the City and the Developer would be willing to enter into an agreement with respect to the
development and conveyance of the Property.
DEVELOPER:
VMG INVESTMENTS,INC.
Authenti
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As its:
The undersigned City Manager of the City accepts the foregoing LOI as the basis for a proposed
transaction. Developer acknowledges that City Commission approval shall be required in
connection with this transaction.
CITY:
CITY OF OCOEE,FLORIDA
By: Date:
Rob Frank, City Manager
2 N. BLUFORD AVE.
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