Title
Cornerstone Land Condominium (B)
Explanation
In May 2015, the CRA Board approved the 100% master plan for the 13.6 acre Cornerstone development, which is an expansion of the campus where the Gainesville Technology and Entrepreneurship Center (GTEC) is located. The master plan is a blueprint for a mixed-use site with up to ten new commercial buildings, which will provide opportunities to retain GTEC graduates on site as well as attract new economic activity to the area.
At the August 4, 2016 meeting, the Commission approved a development deal with the City, CRA, and Concept Companies that included the disposition of pads C and D at Cornerstone through a lease with the option to purchase. Within the framework of that deal, Staff was approved by the CRA Board to perform 90% of the horizontal improvements necessary to complete the master plan including utilities infrastructure, parking lot, common area landscaping, storm water improvements, etc. The first phase of construction has begun, which includes all of the building pads located to the east of SE 21st Street. Construction is anticipated to be completed in January 2018.
Since that time, the terms of the agreement between Concept Companies and their Tenant, Merieux Nutrisciences, have been solidified; placing the Developer in a position to purchase building pads C and D (now combined into one pad referred to on the master plan as building pad C). The developer and City have entered into a License Agreement for Access and Construction to begin construction and meet the completion deadlines of their tenant. Without each lot located within the Cornerstone campus having direct connections to publicly maintained rights of way, a land condominium is required in order to sell individual lots. In lieu of a short term Ground Lease, once the condominium declaration has been recorded, Concept Companies will be allowed to purchase the land.
As the Master Developer and majority unit owner for the condominium, the CRA will bear the staffing and financial commitments as follows:
Financial Commitments
The condominium will be comprised of 5 units in Phase 1. In Phase 2, a sixth unit, the GTEC building, may be added. Each of the 5 units in Phase 1 will be responsible for a portion of the condominium association expenses, including any special assessments based on the square footage of the buildings to be constructed on each pad. The budget will be established annually by the condominium association. Once the City sells Unit C to Concept Company, Concept Company will be responsible for its pro rata share of the quarterly condominium association fees and ad valorem taxes. The CRA will be responsible for its pro rata share of the quarterly condominium association fees and ad valorem taxes. Additionally, CRA will be responsible for the fees for the GTEC building’s use of the condominium common elements.
Staffing Commitments
The condominium will be run by a board of directors. The minimum number of directors required is three. The City will be the majority unit holder, as well as the developer and as such, City will hold majority membership on the board until the pads are sold, as described earlier. CRA staff will serve as board members.
In closing, this is a complex real estate deal with a local developer and an international client. The complexity of the deal has evolved and CRA Staff along with City Legal Staff have been in negotiations over the past year to complete the development of the property in a manner that protects the City's assets while encouraging economic growth in the Eastside Redevelopment Area. The next time CRA Staff comes forward with a related item it will be for the finalization of the condominium documents and approval of the sale agreement with Concept Companies.
Fiscal Note:
The Condominium Association Fees will be approximately $50,000 per year.
Recommendation
CRA Executive Director to CRA Board: Hear Update