Title
Due Diligence for Purchase of Biomass Facility (B)
Explanation
On April 19, 2017, the City Commission approved a Memorandum of Understanding with Gainesville Renewable Energy Center, LLC (GREC LLC) in which the parties agreed on a purchase price of $750 million for the City to purchase the GREC biomass facility assets. In the MOU, the parties further agreed to use commercially reasonable efforts to complete negotiations on a purchase and sale agreement by August 24, 2017, close on the purchase/sale by November 24, 2017 and to stay the pending arbitration between the parties until such time as the parties execute a Purchase and Sale Agreement. The MOU was executed by both parties and became effective on April 24, 2017.
Between April and August 2017, the GREC Manager and General Manager for Utilities negotiated the terms of a draft Asset Purchase Agreement. On August 22, the Utility Advisory Board (UAB) voted to recommend the City Commission approve the APA. On August 24, the City Commission approved the APA and authorized the Mayor to execute same only after staff reports the results of due diligence inquiries to the UAB and the City Commission and the City Commission votes to accept the due diligence results as satisfactory. The APA provides that the City has until Thursday, September 14 to sign the APA.
If the City Commission votes to accept the due diligence results as satisfactory and the Mayor signs the APA on or before September 14, the APA will become binding and effective. If the Commission finds the due diligence results are not satisfactory, the parties can either negotiate further or terminate discussions, the Mayor will not sign the APA and it will not become effective.
City Staff (with assistance of outside consultants and legal counsel, as needed) engaged in five categories of due diligence review, summarized as follows:
1. Permits/consents/approvals: Existing permits, consents and approvals for the biomass facility (a...
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