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Home My WebLink AboutItem #28 Discussion of an Unsolicited Offer from Red Apple Development, Inc. to Purchase City-owned Property at the Intersection of AD Mims Road and Clarke Road for $1.8 Milliont I Florida AGENDA ITEM COVER SHEET Meeting Date: December 2, 2014 Item # Q�3 Reviewed By: Contact Name: Al Butler, Support Services Department Director: Contact Number: 407 - 905 -3100, ext. 1543 City Manager: Subject: Discussion of an unsolicited offer from Red Apple Development, In(.`U purchase city -owned property at the intersection of AD Mims Road and Clarke Road for $1.8 million (District 4 — Keller) Background Summary: The City acquired 12 acres of land (Parcel No. 09- 22 -28- 0000- 00 -05) from the Silvestri Investment Group of Florida, Inc. on December 29, 2006, at a cost of $3.5 million for the purpose of constructing a new Police Department headquarters building. The City subsequently purchased and remodeled the former State Farm claims office in the southern part of the city for this use; the former Silvestri property remains undeveloped. The outstanding mortgage amount is approximately $2.6 million. The subject property is bordered on the south by railroad right of way, which is adjacent to AD Mims Road, to the north and east by the Prairie Lake Reserve Subdivision, and on the west by Clarke Road. A portion of the eastern boundary is property dedicated to the public use and owned by the City. A drawing showing the property and the proposed portions covered by the offer is provided on the next page. The base map used in the drawing is taken from the Orange County Property Appraiser's online mapping system. Red Apple Development, Inc. has submitted an unsolicited offer to purchase approximately 9 acres of the property for $1.8 million with a three -year right to purchase an additional 3 acres for $600,000. The offer represents an average price of $200,000 per acre. Under this offer, if fully implemented, the city would retain only the strip along Clarke Road, immediately to the west of the 2 acre parcel remaining under the ownership of Silvestri Investments of Florida, Inc. The offer is contingent upon receipt of all necessary approvals for construction of a K -8 charter school on the site. A deposit of $25,000 would be paid upon execution of a sales agreement. The buyer would have 90 days for property inspection, during which time the buyer may cancel the transaction for any reason, with the deposit fully refunded. Issue: Should the City Commission authorize staff to negotiate a sales agreement with Red Apple Development, Inc. along the lines of the offer to buy? Recommendations Staff makes no recommendations regarding the offer; however, it is useful to note that the offered price represents 67% of the city's original per -acre purchase cost and that charter schools pay no property taxes. Z 185 O Coee Vista Pkwy i PW G L eigh -�/ -'W ' a Q 'R1LP ml i} s' _{ 3± Acres Cit Of otcw* Reserved for Future Purchase VL t, �t .r , s p ad1 0 690 It Drawing showing the proposed property transactions. Attachment: Offer to buy from Red Apple Development, Inc., including a sketch provided to explain the offer. Financial Impact: It is not possible at this time to identify the financial impact of the contemplated land sale. The offer is silent as to the conditions that may be imposed on the city related to the right to acquire the additional 3 acres of land; e.g., would it be on the order of a first right of refusal should the city want to sell the property to another party, or would the city be barred from selling the property to anyone else pending expiration of the reservation period. a caeul >«a G ty 0,itow Ira �•'.QI Type of Item: (please mark with an 'Y) 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 Reviewed by Finance Dept. N/A N/A N/A N/A Reviewed by Reviewed by 3 ./ RE D APPLE DFVELrQPMENT, LLC Letter of Intent for Purchase of Real Estate Date: November 24, 2014 Seller: City of Ocoee 150 N Lakeshore Dr. Ocoee, FL 34761 Purchaser: Red Apple Development 800 Corporate Blvd Ft. Lauderdale, FL 33334 or Assigns Description of Property: Approximately 9 + / - acres of property (or as needed to accommodate a Charter School) on AD Mims Rd / Clarke in Ocoee, Florida. Form of Purchase: A purchase agreement ( "Agreement') will be drafted whereby the Seller agrees to sell and the Purchaser agrees to purchase for cash, the certain property described above. Purchase and Sale Agreement: Within 7 days of the execution of this LOI, Purchaser will present Seller with a Purchase and Sale Agreement for consideration and comment. Purchase Price: $1,800,000. Cash at Closing. Option: Purchaser has the right to buy the remaining 3 + /- acres from the City of Ocoee for 3 years at a price of $600,000. Deposit: Purchaser to deposit $25,000 ( "Deposit') into an escrow account for the benefit of Seller. The Deposit will be fully refundable if, for any reason, Purchaser decides not to proceed at any time prior to the expiration of the Inspection period. Inspection Period: Purchaser shall have a ninety (90) day Inspection Period that extends from the date of execution of the Purchase and Sale Agreement. During this time, Purchaser shall have access to, and may conduct any and all tests it deems necessary on the Property. The Purchaser shall have the right to cancel the Agreement for any reason, at any time prior to the expiration of the Inspection Period. Closing: Within 30 days of receiving all necessary approvals for the development and construction of a Charter School on the property, but in no case later that February 27, 2015. Conditions Precedent: Notwithstanding the Inspection Period, Purchaser shall have until January 31, 2015 to achieve all necessary Approvals for the Development and Construction of a K -8 Charter School on the property. Purchaser shall pursue those Approvals with diligence and timeliness. Seller shall cooperate in the submittal of any applications. Broker: Both Purchaser and Seller warrant and represent to the other there are no real estate brokers other than Andy Bassler of Central Florida Land Brokers & Randolph Diamond of Red Apple Real Estate, LLC. Buyer will be responsible for paying Broker's commissions. No Agreement: This letter summarizes our intentions to date; however, it shall not be construed as an agreement of sale and purchase. No binding agreement shall exist until the parties have approved and executed a Purchase and Sale Agreement. By signing this letter of intent below, Seller and Purchaser agree to act in good faith to negotiate a mutually acceptable contract for the sale and purchase of the Property. Confidentiality: The terms of this Letter of Intent shall be treated as confidential information between the parties for discussion purposes only and shall not be shared with any person or entity other than those individuals employed with, or agents of, the parties, as expressly outlined herein. Should the terms and conditions hereof be acceptable, please sign below and a Purchase and Sale Agreement acceptable to both Seller and Purchaser will be drafted, time being of the essence. Purchaser: Seller: Scott Woodrey Name: Vice President of Development Title: Red Apple Development, LLC Date: