Item 18 Discussion of an Unsolicited Offer from Forges Realty Group to Purchase City-owned Property Located at 112 South Bluford Avenue. Ocoee
florida
AGENDA ITEM COVER SHEET
Meeting Date: December 4, 2018
Item # /8
Reviewed By:
Contact Name: Craig Shadrix . Department Director: /fit
Contact Number: 407-905-3111 City Manager: Robert Frank
Subject: Discussion of an unsolicited offer from Forges Realty Group to purchase city-owned property
located at 112 South Bluford Avenue
Background Summary:
In August of the year 2016, the City acquired property at 100 and 112 S. Bluford Avenue consisting of
two parcels (17-22-28-5504-02-090 and 17-22-28-5504-02-040) containing seven original lots forming a
rectangle of 178 ft. along the east side of S. Bluford Avenue and 85 ft. along the south side of Magnolia
St.; the total land area is approximately 15,000 SF. A 940 SF wood-framed commercial storefront
building constructed in 1925 sits on the southern end of the property. The City purchased these two
parcels for a total of $225,000 which was $25,000 higher than the appraised value in 2016. The City
recently received an unsolicited offer from Forges Realty Group to purchase the property for a total price
of$135,000.
According to Section C-8 (2) of the City Charter, "When any proposal for the disposition of real property
owned by the city, either by sale or by lease for a term exceeding five (5) years, shall receive a majority
vote of the members of the City Commission and the fair market value of the real property concerned
exceeds one hundred thousand dollars ($100,000.00), such action shall not be effective unless it has
been acted upon by the City Commission after a public hearing preceded by at least seven (7) days'
notice of the hearing and the proposed action by publication in the manner set forth above". If the City
Commission wishes to proceed with evaluation of this offer, the appropriate steps are for the City to
obtain a fair market appraisal of the land (the previous appraisal is not considered valid because it is
greater than one year old) and, assuming the appraisal supports the price, negotiate the contract terms
(if necessary). Once the contract is negotiated but before execution by the City, the City would hold an
advertised public hearing on the matter. Assuming the City Commission elected to proceed following
such hearing, the City Commission would approve execution of the contract.
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Issue:
Should the City Commission authorize staff to obtain an appraisal of the fair market value of city-owned
property located at 112 South Bluford Avenue appropriating up to $3500 from the contingency fund
balance; and, pending the appraisal, to negotiate a sales agreement with Forges Realty Group?
Recommendations
It is recommended that the City Commission authorize the City Manager and Attorney to obtain a fair
market appraisal of the property using up to $3500 from the contingency fund balance; and, pending the
appraisal, to bring a contract to the Commission in compliance with Section C-8 of the City Charter for its
consideration.
Attachments:
Proposed contract by Forges Realty Group
Financial Impact:
As of the November 20, 2018 City Commission meeting, the contingency fund balance was $51,500,
which is more than adequate funding from which to obtain the cost of the appraisal. The proposed offer
of $135,000 is considerably less than what the City paid in 2016. However, it should be considered that
the buyer intends to create a viable office building on the property, adding it to the tax base. It should
also be considered that the buyer would need to spend between $50,000 and $100,000 to renovate the
building to a leasable condition, and the buyer has indicated willingness to comply with downtown design
standards, which could result in additional expense.
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Forges y Group
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Tuesday, October 31, 2018
Rob Frank
City of Ocoee
150 N Lakewood Ave.
Ocoee, FL 34761
RE: 112 S Bluford Ave., Ocoee FL 34761
Dear Mr. Frank:
This letter (the "LOI") outlines the general terms upon which Forges Realty Group, LLC., is hereby
offering to purchase the Property (defined below) at the price and terms outlined below. Upon mutual
execution of this LOI, a formal Contract (defined below) between Buyer(defined below) and Seller
(defined below) shall be drafted by Buyer incorporating the terms and conditions specified herein, plus
any other terms and conditions that are mutually acceptable to Seller and Buyer.
TERMS AND CONDITIONS
1. PROPERTY: 112 S Bluford Ave., Ocoee, Florida 34761. Parcel ID: 17-22-28-5504-02-040
2. SELLER: City of Ocoee, or current owner of record (the "Seller").
3. BUYER: Forges Realty Group, LLC., a Florida limited liability company (the "Buyer").
4. TIME FOR ACCEPTANCE: The LOI must be signed by Seller on or December 1, 2018.
5. PURCHASE PRICE: One hundred thirty-five thousand AND NO/100 Dollars ($135,000.00)
(the "Purchase Price").
6. TERMS:
a. At closing, Buyer shall pay the sum of One hundred thirty-five thousand AND NO/100
Dollars ($135,000.00) AS-IS.
7. EARNEST MONEY DEPOSIT: The Buyer shall deposit with an escrow agent the sum of ten
thousand and NO/100 dollars ($10,000.00) (the "Deposit") within two (3) business days of the
effective date of the Contract. The Deposit shall be applied toward the Purchase Price at Closing
and credited towards Buyer's cash payment due at that time.
8. DUE DILIGENCE: Buyer agrees to accept the Property in its "as is", "where is" condition and
waives any inspection rights except as otherwise expressly set forth herein. The foregoing to the
contrary notwithstanding, the Buyer shall have twenty (20) days after the effective date (the
"Survey Period") to have the Property surveyed by a licensed Florida surveyor. Any defects in
P.O. BOX 461 • OCOEE ♦ FL 34761 PH:407-592-7710 ♦ Fax:877-876-2702
www.ForgesRealtyGroup.com
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Forges Realty Group
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title revealed by the survey shall be treated as a title defect in accordance with the section below
labelled "Title". Seller shall provide Buyer's surveyor or other professionals with access to the
Property upon execution of this LOI, or as soon as is practical thereafter. Buyer shall indemnify
Seller for any such entries by third parties to the Property. Seller will provide copies of any
existing surveys, environmental reports, geo-technical studies, or other property information to the
Buyer within three (3) days of the effective date of the Contract, but only to the extent that such
reports or studies are in the Seller's possession and control.
9. LOAN CONTINGENCY: NONE
10. CLOSING: The Contract shall be closed (the "Closing") on or before the later of January 15,
2019
11. TITLE: Seller will convey good and marketable title to the Property to Buyer, free and clear of
all monetary liens and other encumbrance, except those specifically approved by Buyer. Seller, at
is expense, will provide Buyer with a title commitment on current ALTA forms within ten (10)
days after the effective date of the Contract. Buyer, at its sole discretion, will either approve or
disapprove title within ten (10) days. In the latter event, or in the event Buyer neither approves
nor disapproves title within the time permitted, the Contract will automatically terminate and the
Deposit will be refunded to Buyer. Seller will be under no obligation to cure any title matters to
which Buyer objects except monetary encumbrances. If, however, Seller agrees to remove an
exception to which Buyer has objected, Seller will be given reasonable time to use good faith
efforts to do so. If Seller is unable to cure or remove the objectionable item after exercising such
good faith efforts, the Contract will automatically terminate and the Deposit will be refunded to
Buyer. Seller will not permit title to be impaired or altered after issuance of the title commitment.
12. PREPARATION AND EXECUTION OF CONTRACT: Upon execution of this LOI, Buyer
and Seller shall use their best efforts to negotiate the terms of, seek outside counsel in regards to,
prepare in its final form, and execute a Contract for Sale and Purchase (the "Contract")
incorporating all terms to be agreed upon between Buyer and Seller so that all parties are in
possession of an executed Contract within ten (10) calendar days of mutual execution of this LOI.
13. COSTS: Seller shall pay for the cost of the owner's title insurance policy, transfer taxes on the
deed, and any costs of settlement. Buyer shall pay for the cost of the Loan, any Lender's title
insurance policy and endorsements, and the cost of recording the deed and any mortgage securing
the Loan. Rents and other forms of income, taxes, and other expenses shall be prorated to the date
of closing. Security deposits shall be charged to the Seller and credited to the Buyer. Buyer will
pay its own due diligence costs and Property inspection fees. Buyer and Seller will each pay their
own legal fees, if any. All other costs will be allocated as is customary in Lake County, Florida.
14. ESCROW COMPANY: The escrow agent shall be with a title company or legal counsel to be
selected by Seller.
P.O. BOX 461 • OCOEE • FL 34761 PH:407-592-7710 ♦ Fax:877-876-2702
www.ForqesRealtyGroup.com
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Forges Group
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15. BROKER DISCLOSURE: The Buyer to this transaction is a licensed real estate Broker in the
State of Florida.
16. EXCLUSIVITY: In consideration of Buyer's effort and expense in analyzing this acquisition,
Seller agrees that so long as Buyer is proceeding in good faith to negotiate a Contract, and
provided that the Buyer has not exceeded the time frames allowed herein, and, further, provided
that either party shall have the right to terminate the effect of this provision by written notice if the
parties are unable to reach agreement as to the form of and execute the definitive Contract within
the time period stated above, Seller will not make, accept, negotiate, or otherwise pursue any
offers for the sale or purchase of the Property.
17. COUNTERPARTS AND FACSIMILE: This Letter of Intent may be executed by the parties
hereto in counterparts, and may be delivered via facsimile transmission. Copies of this Letter of
Intent executed in counterpart, whether delivered in its original form or via facsimile transmission,
when taken in the aggregate, shall constitute a fully executed, valid, and binding Agreement.
The above general terms and conditions are not fully exhaustive. Additional issues will need to be
addressed in the formal Contract. While we anticipate that the definitive Contract will be generally
consistent with this LOI, this LOI shall not create any legal rights or obligations on behalf of or between
Seller and Buyer. Nothing herein constitutes an offer to purchase or acceptance of an offer to sell. This
LOI is not a contract. Neither party shall be bound or obligated to perform under the above terms unless a
Contract is executed.
If the above is acceptable to you as the basis for a possible transaction,please sign this LOI in the space
provided below and return the same to me no later than July 27, 2012. Upon my receipt of the executed
LOI, Buyer will promptly proceed with the preparation of a formal Contract.
We look forward to working with you.
P.O. BOX 461 ♦ OCOEE ♦ FL 34761 PH:407-592-7710 ♦ Fax:877-876-2702
www.ForgesRealtvGroup.com
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Forges Realty Group
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BUYER:
FORGES REA ROUP, LLC.
By: '/7 Date: C c 1 3c ) I
Print Name: t-- ELL-- p S
As its: -_
The undersigned Seller accepts the foregoing LOI as the basis for a proposed transaction.
SELLER:
Rob Frank, City of Ocoee
By: Date:
Print Name:
As its:
P.O. BOX 461 • OCOEE ♦ FL 34761 PH:407-592-7710 ♦ Fax:877-876-2702
www.ForgesRealtyGroup.com