HomeMy WebLinkAboutItem 14 City Attorney Discussion Regarding the Contract for City-Owned Property
City of Ocoee ▪ 1 N. Bluford Avenue ▪ Ocoee, Florida 34761
Phone: (407) 905-3100 ▪ www.ocoee.org
STAFF REPORT
Meeting Date: March 4, 2025
Item #: 14
Contact Name: Michael Rumer Department Director: Michael Rumer
Contact Number: Ext. 6434 City Manager: Craig Shadrix
Subject: City Attorney Discussion Regarding the Contract for Purchase of 17.96 acres of City-
Owned Property by GPK OET LLC
Background Summary:
During the City Commission meeting on June 4, 2025, Commissioner Kennedy requested that the City
Attorney provide guidance to the City Commission regarding the contract with GPK OET LLC, for 17.96 acres
located on the northeast corner of Ocoee Apopka Road and Fullers Cross Road, and outline the necessary
steps for its termination. After a comprehensive review of the contract's history, which began in August 2020,
the requested guidance will be presented.
Issue:
City Attorney guidance to the City Commission regarding the contract by GPK OET LLC, and the necessary
steps for its termination.
Recommendations:
City Attorney will provide guidance for further action.
Attachments:
1. Memo Regarding Analysis of Termination Options
Financial Impacts:
N/A
Type of Item: Regular
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MEMORANDUM
TO: Mike Rumer, Assistant City Manager
FROM: Rick Geller, City Attorney
RE: Termination of GPK OET Purchase and Sale Agreement
Date: February 27, 2025
______________________________________________________________________________
Question: Can the City lawfully terminate the GPK OET contract?
Short Answer: The City can declare GPK OET in default for: (1) failing to pay the $5,000.00
Contract Fee; (2) failing to timely obtain Government Approvals; and (3) failing to pay $30,000.00
to extend the Government Approval deadline. The Agreement states that “time shall be of the
essence with respect to all matters contemplated by this Agreement.” GPK OET has failed to
timely comply with all its obligations.
ANALYSIS
Timeline
The following is a timeline for GPK OET:
Oct. 12, 2020 – Effective Date per Purchase and Sale Agreement (the “PSA”)
Oct. 14, 2020 – Deadline to pay $10,000.00 Initial Deposit and $5,000.00 Contract Fee (5 days
after full execution by Buyer on Oct. 9, 2020)
Dec. 19, 2020 – Due Diligence Termination Date (60 days after Effective Date)
Dec. 24, 2020 – Deadline to pay $65,000.00 Second Deposit (5 days after Due Diligence
Termination Date)
Dec. 19, 2021 – Deadline to obtain the Governmental Approvals
June 17, 2022 – Deadline to obtain the Governmental Approvals with two 90 day extensions for
$15,000.00 each, for a total of $30,000.00.
Section 14.9 of the PSA states, “Time shall be of the essence with respect to all matters
contemplated by this Agreement.”
GPK OET’s Breach of Contract
Our escrow records show $75,000 transferred to our firm from Shuffield Lowman on Nov. 21,
2023, which is consistent with the Initial Deposit ($10,000) and Second Deposit ($65,000) required
in the GPK OET PSA. We have no record of the $5,000.00 Contract Fee. Nor do we have any
record of any $15K deposit to extend the deadline to obtain Governmental Approvals.
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Termination of Purchase and Sale Agreements
February 27, 2025
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We do show a $15,000 transfer to our escrow account from the City on Feb. 15, 2024, for a GPK
affiliate, GPK TB, for a smaller 7-acre parcel that the City Commission approved for conveyance
to a Montierre affiliate, MDTL ENTERPRISE, LLC. The closing on that parcel is scheduled for
March 27, 2025.
Even if GPK OET were to cure its failure to pay the City the $5,000.00 Contract Fee and
$30,000.00 in fees for extending the Government Approval deadline, the PSA does not
contemplate an extension for Government Approvals beyond June 17, 2022.
It is well established in the case law that one party to a contract cannot prevent the other’s
performance and then declare a breach. Based on my discussions with staff, I am not aware of any
material delays by the City in the processing of any application for Governmental Approvals.
Time is of the Essence Clause
A “time is of the essence clause” adds urgency to the contract to ensure that the parties abide by
the timeline the contract is attempting to enforce. Normally, missing a deadline does not
immediately translate to breaching a contract. However, in a contract that is more time-sensitive,
a time is of the essence clause is used to ensure that the parties will stick to their deadlines and
failing to do so is deemed a breach of contract.
No Waiver
The City Commission approved of an Amendment to the PSA on July 18, 2023 (executed on
October 30, 2023), reducing the purchase price for right-of-way conveyance and reimbursement
of $54,380.00 in due diligence expenses by GPK OET.” The Amendment did not waive the
$5,000.00 Contract Fee, the $30,000.00 in governmental approval extension fees, or GPK OET’s
failure to timely obtain all Government Approvals. Section 14.3 of the original PSA states, “No
waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) ….”
10 Day Cure Period and the City’s Right to Terminate
If the City declares GPK OET in default for failing to pay the $5,000.00 Contract Fee, for failing
to pay $30,000.00 to extend the Government Approval deadline, and for failing to timely obtain
Governmental Approvals, and that the City intends to terminate the Agreement, GPK OET would
have a 10 day cure period. Section 12.2 of the PSA states:
Default by Buyer. If Buyer shall breach any of the terms or
provisions of this Agreement or otherwise fail to perform any of
Buyer’s obligations under this Agreement and if such failure
continues for ten (10) days after Seller provides Buyer and Escrow
Agent with written notice thereof, and provided Seller is not in
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Termination of Purchase and Sale Agreements
February 27, 2025
Page 3
default, then…Seller may, as its sole and exclusive remedy,
terminate this Agreement and retain the Contract Fee and the
Deposit as liquidated damages and as consideration for the
acceptance of this Agreement and for taking the Property off the
market, and not as a penalty.
GPK OET could not obtain all required Government Approvals within 10 days.
When the buyer is in breach, the City may return the Contract Fee and Deposit, as stated above.
Otherwise, GPK OET would be entitled to the return of its $75,000.00 deposit. Section 3.3 of the
Purchase and Sale Agreement states in pertinent part:
Termination. Upon any termination of this Agreement by either of
the parties hereto as expressly allowed under this Agreement
(including, without limitation, any deemed termination): … (b) the
Deposit shall be delivered to the party that this Agreement specifies
is entitled hereto; (c) all other documents, instruments, and funds
delivered to Escrow Agent…shall be returned to the party that
delivered the same thereto; and (d) the parties shall thereafter be
relieved from further liability hereunder, except with respect to any
obligations under this Agreement that are expressly stated to survive
any termination of this Agreement.
If the City terminates the Agreement, GPK OET would raise a claim for their $75,000.00 deposit
as well as the $54,380.00 in due diligence expenses incurred, as stated in the Amendment to the
PSA.
Information Needed for Further Analysis
Did GPK OET furnish the proof of $1 million/incident and $2 million/aggregate liability insurance
required by Section 4.1.2.3 of the PSA? If not, this would be another grounds for asserting a
breach of contract.
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