Item #16 Discussion of an Unsolicited Offer from Beazer Homes to Purchase 8.5 Acres of City-Owned Property Near the Intersection of AD Mims Road and Clarke Road for $960,000. ocoee
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AGENDA ITEM COVER SHEET
Meeting Date: April 3, 2018.
Item # /lp
Reviewed By:
Contact Name: Craig Shadrix Department Director:
Contact Number: 407-905-3111 City Manager:
Subject: Discussion of an unsolicited offer from Beazer Homes to purchas .5 acres of city-owned
property near the intersection of AD Mims Road and Clarke Road for$960,000 (District 4— Oliver)
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 relocated the Police Department
to another facility, with the result that 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 for future road
construction. The outstanding amount of the bond used to finance the purchase is approximately $2.6
million.
The Orlando Division of Beazer Homes has submitted an unsolicited offer to purchase approximately 8.5
acres of the property for $960,000. The city would retain the 15-foot-wide strip along Clarke Road
(intended for a future right-turn deceleration lane), plus 3.5 acres in the southwest corner of the property,
which may have a future commercial use. Silvestri Investments of Florida, Inc., continues to own an
adjacent 2-acre parcel on Clarke Road.
A townhome development is proposed for the subject property once it is acquired, with an estimated 64
units being constructed. The offered price is contingent upon adequate water and sanitary sewer service
and approval for the construction of at least 60 residential townhome units. The proposed contract would
include a provision that the purchase price would vary by $15,000 for each townhome approved above or
below the $960,000 price. If fewer than 60 townhomes are approved, the purchase price would be
$900,000. A deposit of $50,000 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.
1
,
Issue:
Should the City Commission authorize staff to negotiate a sales agreement with Beazer Homes along the
lines of the offer to buy?
Recommendations
Staff makes no recommendations regarding the offer. The original purchase price was $292,000 per
acre. The subject property was appraised in June 2015 as having a value of $144,000 per acre for
residential use. The proposed sales price is $113,000 per acre.
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Drawing showing the proposed property transaction.
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Attachment:
Offer to buy from Beazer Homes
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 buyer would be given a right of first refusal for the balance of the
property to be retained by the city if the proposed land use is residential.
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.
Section C-8.B(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 at a later date if a
proposed sales agreement can be crafted. A financial impact opinion would be provided by staff at that
time. 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 action at a second City Commission meeting following public input.
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 X 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
N/A
Reviewed by Finance Dept.
Reviewed by
N/A
Reviewed by N/A
3
City of Ocoee BEAZER
150 N Lakeshore Dr.
Ocoee, FL 32761-72,3
Letter of Intent
01 /26/2018
Property: Parcel: 09-22-28-0000-00-056(8.5 -+.,I-gross acres). Citi, of Ocoee.
Purchase Price: Nine Hundred and Sixty Thousand Dollars(S960,000) CASH at Closing.
• The Purchase price is based on Approvals for 64 townhomes.
• the Purchase Price will he adjusted by $15.000'townhome in the event that
the total lot count is more or less than the estimated 64 townhomes.
• Deposits: $5(.(100 at Time of Contract Execution.
Inspection Period: 90 L)ays from the date of the mutual execution of the Contract.
P. (losing: the('losing shall take place 10 days atter all Conditions Precedent are met
• Conditions Precedent: the following items will be a condition to the Initial Closing:
I he property shall he fully permitted for a minimum of 60 residential
townhomes. through all applicable agencies. ($900.000 Minimum
Purchase Price). Should the townhome count fall below 60 townhomes.
the Buyer shall have the Option to Close at the Minimum Purchase Price.
Adequate water and sewer capacities and connections, to service the
proposed development.
• Additional The Seller shall retain approximately 3.5 {'-acres on the northeast corner of Clarke
Consideration: Rd. and the CSX Railroad. for Commercial development. The Buyer shall have a
Right-Of-First Refusal on any Residential Use offer for the residual property.
• Broker: Charles Vickers. at Central Florida Land Brokers. represents the Buyer on this
transaction. At Closing. Buyer shall pay the Commission due and payable to
Central Florida I:and Brokers. in relation to this transaction.
• Information: Seller shall provide to Buyer all copies ot. plats. construction plans._acceptance
letters. purveys.environmental reports, soil tests. engineering studies and other
related tests. investigations. and examinations that Seller may have access to or
control over that are reasonably necessary for Buyer to satisfy itself with respect to
the Subject Property acquisition. Seller shall provide to Buyer all such information
within five(5) business days of the effective date of contract.
Good Faith Efforts: litiyer and Seller agree to work in good faith with each other and shall diligently
endeavor in a timely fashion (i) to complete negotiations and fully execute the
Agreement and(ii)to consummate the sales contemplated by the Agreement
• Exclusive Opportunity: Following the execution of this Letter of Intent.the Seller will not negotiate or
enter into discussions with any other party,or offer the Property, or any direct or
indirect interest therein for sale to any other party until termination of the
.Agreement of Sale.
• Confidentiality: l3uver and Seller agree to keep confidential all discussions of the proposed
acquisition, except for necessary disclosures to partners. employees.accountants.
attorneys, lenders and consultants of the parties. No public announcement
concerning this Letter of Intent.the Agreement or the transaction contemplated
herein shall be made by either party without mutual consent.
This is a Letter of Intent only and shall he non-binding on the parties, and nothing in this LOl should be construed as a
binding purchase offer or other obligation or create any. rights in favor of Purchaser or Seller or any other third party.
Furthermore, this 1.01 does not address all matters upon which agreement must he reached in order for the proposed
transaction to he consummated. Neither party shall be under any binding obligation until such time a mutually
agreeable contract is fully executed by the authorized officers ;partners of each organization
If we do not receive a countersigned copy of this letter from the Seller within 10 days of the date hereof.then the terms
of this letter shall he deemed null and void.
Please feel tree to contact us with any questions or comments that you may have regarding these matters. Thank you
for providing us with this business opportunity.
Sincerely..
Eric C.. Morrisette. AICA'
Vice President of Land \cquisition
Beazer Montes Orlando Division
Seller Acceptance:
Signature Date
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