Item #17 Discussion of an Unsolicited Offer from Charter Schools Development Corp to Purchase AcresoCoe P
floricia
AGENDA ITEM COVER SHEET
Meeting Date: May 19, 2015
Item #
Contact Name: Al Butler, Support Services
Contact Number: 407 - 905 -3100, ext. 1543
Reviewed By.
Department Director:
City Manager:
Subject: Discussion of an unsolicited offer from Charter Schools Development Corp. to purchase 9.5
acres of city -owned property at the intersection of AD Mims Road and Clarke Road for $1.6 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 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. The outstanding amount of the bond used to finance the purchase is approximately
$2.6 million.
Charter Schools Development Corp. has submitted an unsolicited offer to purchase approximately 9.5
acres of the property for $1.6 million. This is the second unsolicited offer the city has received to
purchase this property for a charter school. The original offer from Red Apple Development, Inc. was
withdrawn when the company discovered it would be unable to meet construction deadlines due to the
time required to conduct habitat investigations mandated by an environmental protection agency.
The current offer represents an average price of about $168,421 per acre. The city would retain the strip
along Clarke Road, immediately to the west of the 2 acre parcel remaining under the ownership of
Silvestri Investments of Florida, Inc., which is reserved for future construction of a right -turn lane, plus the
southwest corner of the property. The offer is contingent upon receipt of all necessary approvals for
construction of a K -8 charter school of at least 80,000 square feet on the site. A deposit of $10,000
would be paid upon execution of a sales agreement. The buyer would have 90 days for due diligence,
primarily to complete a detailed property inspection, during which time the buyer may cancel the
transaction for any reason, with the deposit fully refunded. A second deposit of $10,000 to be paid after
the due - diligence period, assuming that all requirements are satisfied. Both deposits would be applied
against the purchase price, if the transaction is completed. 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.
Issue:
Should the City Commission authorize staff to negotiate a sales agreement with Charter Schools
Development Corp. 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 58% of the city's original per -acre purchase cost, charter schools pay no property taxes, and
construction of another charter school in this portion of the city may impact the ability of Orange County
to build public elementary schools in the area.
185
` OCO" Vista Pkwy
TRACT K
r
� a
J
T6
2
.1- JW P Pkwy
MyFsh Palm
TRAiCT A
a tau u, w
City of,Crcoe*
t o o r
, X - \
It
M
1M �
*�
y , r
s •
It st
r
r �
VOL
0 • V� QO t � `
o Drawing showing the proposed property transaction.
2
Attachment:
Offer to buy from Charter Schools Development Corp.
Financial Impact:
It is not possible at this time to identify the financial impact of the contemplated land sale. The sales offer
proposes but does not quantify some closing costs to be paid by the city. The buyer has proposed to
pay all real estate brokerage fees. The city would be prohibited from marketing the property to other
potential buyers for 30 days from the date of acceptance of the offer to buy.
The city's bond counsel has indicated that the financing used in the original land purchase is somewhat
independent of the land, so the city can sell part or all of the property for a public purpose. Part or all of
the sales proceeds can be used to reduce the amount outstanding on the debt. There also appear to be
no tax impacts from the sale of this property for a charter school, which is an exempt purpose.
Section C- 8.13(2) of the City Charter requires a public hearing to be held prior to the sale of any city -
owned real estate for an amount in excess of $100,000. Under those requirements, the City Commission
would need to first indicate by majority vote that it is willing to sell the property. That action can be taken
at this time, with the motion including authorization to conduct the public hearing. The hearing must be
noticed by publication at least seven days prior to its being held, after which the City Commission may
take final action on the proposed sale. Thus, final action to accept the offer would require a second
meeting and vote.
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
N/A
dV
N/A
Reviewed by Finance Dept.
v
Reviewed by
N/A
Reviewed by N/A
CHARTER SCHOOLS
DEVELOPMENT GROUP
March 20, 2015
Robert Frank, City Manger
City of Ocoee
150 N. Lakeshore Dr.
Ocoee, FL 34761
Re: Approximately 9.5 +/- Acres at the northeast quadrant of Clarke Road and AD Mims Road,
Ocoee FL. See attached exhibit
Dear Sir:
This letter confirms the interest of Charter Schools Development Group, LLC or its assigns ( "
to pursue the purchase of the Property. Buyer is prepared to immediately enter into negotiations for the
purchase of the Property with the City of Ocoee, ( " Seller ") upon the general terms and conditions set forth in
this letter.
Purchase Price. The total purchase price (the " Purchase Price ") to be paid by Buyer to Seller for the
Property is One million Six Hundred Thousand Dollars ($1,600,000.00).
2. Deposit Within ten (10) business days of the date of the purchase and sale contract for the Property
(the " Purchase Agreement "), Buyer will deposit with First American Title Insurance
Company/Philadelphia N.C.S., Attn: Alan Gottlieb (the " Escrow Agent "), the sum of $10,000.00 (the
" Initial Deposit "). Within ten (10) business days after the end of the Due Diligence Period (as defined
below), Buyer will deposit with the Escrow Agent the additional sum of $10,000.00 (the " Second
Deposit The Initial Deposit and the Second Deposit together with interest thereon are sometimes
collectively referred to herein as the " Deposit ."
3. Payment of Funds. The Deposit will be applied against the Purchase Price at Closing (as defined
below). The balance of the Purchase Price will be paid by wire transfer at Closing.
4. Due Diligence Period
A. Buyer shall have a period of 90 days from the date of the Purchase Agreement (the
" Due Diligence Period to perform its due diligence, including but not limited to (i) soils evaluation
and environmental studies and inspections of the Property and (ii) review of title, survey, compliance
of the Property and its existing uses with local law, service contracts and other documents and
information relating to the Property. Seller shall provide Buyer with reasonable access to the Property
to conduct such inspections. Buyer shall have the right to terminate the Purchase Agreement if Buyer,
in Buyer's sole discretion, is not satisfied for any reason with its due diligence at any time prior to the
end of the Due Diligence Period. Upon such termination, the Deposit shall be returned to Buyer. In
the event that Buyer fails to terminate the Purchase Agreement within the Due Diligence Period, then
Buyer shall be deemed to have waived its right to do so and the Deposit shall be non - refundable to
Buyer in the event the Buyer is in default under its obligations under the Purchase Agreement. Buyer,
at Buyer's option, shall have the right to reduce the Due Diligence Period by providing written notice
to Seller.
B. Within ten (10) days after the execution of the Purchase Agreement, Seller shall
provide to Buyer all information relating to the Property that is in Seller's possession, including, but
not limited to, title information, surveys, development plans, soil inspection reports, environmental
inspection reports, property tax records, construction agreements and schedules, utility systems as-
built information, and utility service availability letters /agreements from the service provider. If
requested by Buyer, Seller shall obtain, at Seller's cost, reliance letters from the various consultants
that issued such property reports permitting Buyer to rely on same.
5. Title. Seller shall convey to Buyer by statutory warranty deed, good and marketable title to the
Property and such as will be insured by a rated and reputable Title Insurance Company, as approved
by Buyer, free and clear of all liens, encumbrances and restrictions. Seller shall pay the title insurance
premium.
6. Closing The closing of the purchase and sale (the " Closing ") shall occur within 30 days of receiving
all necessary approvals for the development and construction of a Charter School on the property.
Approvals Contingencies If Buyer elects to proceed with the purchase of the Property after the Due
Diligence Period, among other matters to be contained in the Purchase Agreement, the following
(being waivable by Buyer) shall be conditions to Buyer's obligation to proceed with the purchase of
the Property: Buyer shall have obtained, at Buyer's cost, all final and unappealable governmental
approvals including any applicable rezoning, land use plan amendments, development plan approvals,
and engineering and building construction permits as Buyer deems necessary for development of the
Property (the " Approvals ") for Buyer's intended use as a K -8 public charter school of not less than
80,000 gross square feet (the " Project "). Seller shall cooperate in the submittal of any applications.
If any of the conditions to Closing are not satisfied before the Closing Date or are not reasonably
capable of being satisfied before the Closing Date, Buyer may elect by notice to Seller not to proceed
with the purchase of the Property in which event the Purchase Agreement shall be terminated and the
Deposit shall be returned to Buyer.
Authorization to Prosecute Approvals Simultaneously with Seller's execution of this letter, Seller
will sign and deliver to Buyer all authorizations that are necessary in order for Buyer to be able to
immediately submit application(s) to all appropriate governmental authorities for the Approvals.
9. Closing Costs All real estate taxes, water and sewer liens and similar claims will be adjusted at
Closing. Transfer taxes and fees shall be split between Buyer and Seller as is customary in the sale and
purchase of properties like the Property in the county where the Property is located. Recordation
taxes as well as all costs associated with obtaining a survey and legal description of the Property shall
be paid by Seller. Each party shall pay for its own legal, accounting and other professional fees.
10. Brokerage Buyer and Seller will agree to indemnify the other party for any claims for real estate
commissions or finder's fees in connection with this transaction. Seller and Buyer will recognize Andy
Bassler of Central Florida Land Brokers (the "Seller's Broker and Randolph Diamond of Red Apple Real
Estate (the Buyer's Broker). Buyer will be solely responsible for compensating the Brokers, both of
which are accomplished per a separate agreement (not a part of this letter of intent).
11. Purchase Agreement. The Purchase Agreement shall be prepared by Buyer's counsel and shall be in
form and substance mutually satisfactory to Buyer and Seller.
Notwithstanding anything to the contrary contained in this letter, neither Buyer nor Seller shall have
any obligation to the other unless and until a mutually satisfactory Purchase Agreement has been signed and
delivered by both of them; provided, however, for a period of thirty (30) days after the date of Seller's
acceptance, indicated below, Seller agrees not to market the Property for sale to others, and not to entertain
offers from or negotiate with others for the sale of the Property.
If the foregoing is acceptable, please acknowledge your agreement by having this letter signed on
behalf of Seller and returning it to me. Thank you for your consideration.
Very truly yours,
Charter Schools Development Group, LLC
By:
Charle H Cordes, Member
ACKNOWLEDGED AND AGREED BY SELLER:
THIS _ DAY OF 2015
JEL Land Development
By:
Name:
Title:
City of Ocoee master parcel (12 acres). 9.5 acre school site and 2.5 acres
retained by City will need to be more specifically identified by survey.
9.5 ac. school site
2.5 ac. retained by City
Charter Schools Development Croup, LLC
421 South Summerlin Avenue
Orlando, Florida 32801
267.331.4882 Real Estate: 407.456.1262