Title
Extension of Two Year Reverter Clause - Lot #22 Airport Industrial Park (B)
This item requests an extension via Resolution by the City Commission to the two year reverter clause applicable to Lot #22 in the Airport Industrial Park.
Explanation
On September 12, 2005, the City Commission approved sale of Lot #22 in the Airport Industrial Park to J.A. Beguiristain Holdings, Inc. in the amount of $176,225.00. Lot 22 is located adjacent to the southwest of the existing Nordstrom's property and consists of approximately 5.3 acres. A deed of conveyance was executed by the City on November 2, 2005 with closing on the property taking place on November 4, 2005. Proceeds of the sale were forwarded to the Gainesville Alachua County Regional Airport Authority (GACRAA) per prior controlling agreement between the City and GACRAA.
In October, 2007, the City Commission extended the terms of the two year reverter for an additional two years to allow the property owner further opportunities to develop the property. In addition, the City Commission approved the ability of the property owner to transfer ownership of the property to a new corporate entity in which he holds a majority interest.
In August, 2009, staff received a letter from Mr. Berguiristain indicating that based upon the unprecedented crisis in the State's real estate market that he would be unable to fulfill his obligations under the terms of the contract and Airport Industrial Park Covenants and Restrictions. As a result, he is requesting a release of the terms of the reverter and potentially the ability to sell the subject property in the private market.
In order to achieve this result, it has been determined that the provision of the original contract, as well as the applicable provisions of the Airport Industrial Park Covenanats and Restrictions, need to be amended. Because this will take some time, it is recommended that the City Commission initially extend the terms of the reverter an additional 120 days to allow for staff processing of proposed amendments as the most recent extension will expire in late October. At a subsequent meeting, likely in early 2010, the proposed amendments to specific contract provisions and the Airport Industrial Park Covenants and Restrictions will be presented to the City Commission and acceptance will allow for the owner's request to move forward.
This action is in the City's interest for the following reasons:
1) Although ad valorem taxes are being generated on the property, there has been no building activity on Lot #22 and this policy action will likely lead to more timely development of a currently vacant site and therefore greater return to the City;
2) The owner has indicated an interest in allowing the City to assist with pro-actively marketing the site to a compatible and sought after New "Innovative" Economy entity; and,
3) The current Covenants and Restrictions applicable to the Airport Industrial Park and provisions of the contract could force the property to revert to the City with proceeds refunded to the current owner. This is not in the City's interest as the property is currently generating ad valorem tax revenue and the proceeds of sale are not within the City's control per prior agreement with GACRAA.
Fiscal Impact
None.
Recommendation
The City Commission: 1) approve the extension of reverter for a period of 120 days to allow staff to make proposed amendments to the contract and Airport Industrial Park Covenants and Restrictions; and 2) authorize the Mayor to execute said Resolution regarding extension of reverter for Lot #22 in the Airport Industrial Park.
Alternative Recommendation
The City Commission: 1) deny the 120 proposed extension of reverter and said Resolution.