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Oakland Park Square Oct 17 DA Presentation FINAL AAOAKLAND PARK SQUARE October 17, 2018 1 2 OAKLAND PARK SQUARE OVERVIEW This presentation will provide information for the City Commission’s consideration regarding the Purchase and Sale Agreement (PSA) and the Development Agreement (DA) for Oakland Park Square: The concerns that shaped the negotiation process The legislative implementation process that was designed to address and mitigate those concerns The key provisions in the Purchase and Sale Agreement The key provisions in the Development Agreement 3 Mixed -use development Centralize municipal operations Hardened municipal facilities Generation of new taxable value Increase property values Add additional public parking in the downtown Enable the development of residential to support businesses Remediation of the environmental issues Open other opportunities for potential development Conversion of CRA loans to grants 4 The Realization of 13 Years of Planning 5 20042005 2010 2005 Oakland Park CRA Plan 6 Unlike the 2005 Plan,this project is NOT giving away land or money,we are SELLING LAND and for the most part pledging revenues that would not be available but for Integras’s investment in this development. 7 Financial Concerns Asset Protection Desire for Development Development Certainty Limit Investment Risk Credit Worthiness Profitability WHAT GUIDED THE NEGOTIATION Without the City’s commitment to be an anchor tenant this redevelopment project would not be financially viable and would not be built. 8 Lease Commencement Lease Agreement Development Agreement Purchase and Sale AgreementTIME AND EXPENSE CRITICAL PATHCOMMITMENT LEVEL AND LIABILITYImplementation Phases and Liability The Purchase and Sale Agreement and the Development Agreements have been structured to limit liability for both parties. However, as the Developer completes more of the project as defined in the critical path, the City’s commitment and liability to the Developer grows. WHAT IS THE PURCHASE AND SALE AGREEMENT 9 Purpose: The Purchase and Sale Agreement established the terms and conditions underwhichthedeveloperwillpurchasetheWestDixieLotsfromtheCity. Why is it necessary: In addition to facilitating the transition of property, the PSA works together with the DA to protect the City’s assets and ensure that the project is implemented as planned before release of the property. What are the Key provisions: Purchase Price, Inspection Period, Timeline for Approvals, Repurchase Provisions, and Environmental Remediation Provisions. PURCHASE AND SALES AGREEMENT SUMMARY •Purchase Price: •Sets purchase price at $2,550,000 with earnest money deposit provisions: •Price is for the appraised value •Not discounted for potential environmental issues •Inspection Period: •120 days or longer to conclude environmental testing and plan 10 PURCHASE AND SALES AGREEMENT SUMMARY •Timelines and Development Approvals: •Sets timelines for required approvals •Defines and restricts the ability for material changes to the development program and design •Option to Repurchase: •Establishes the City’s sole right to repurchase the property if the Developer does not perform in a timely fashion;cost will not exceed original sale price 11 PURCHASE AND SALES AGREEMENT SUMMARY CONDITIONS PRECEDENT TO CLOSING: This provision seeks to protect the City’s assets,requiring thefollowingbeforethetransferoftheproperty: 1.Development Agreement 2.Environmental Approved Plan and Permits 3.All necessary Development Approvals and associatedrequirements 4.Lease Agreement with the City 5.Closing 12 PURCHASE AND SALES AGREEMENT SUMMARY 13 ENVIRONMENTAL ISSUES AND REMEDIATION PROVISIONS The costs and strategy to address the environmental issues will be determined using a mutually agreed upon process for testing,assessment,and permitting. •Sets process for Purchaser and Seller to: •Review permitting requirements and assess the costs.Parties either commit to the costs necessary to fulfill permitting requirements or terminate the agreement under certain conditions. •If after the Environmental Approval Plan and Permit have been issued and the closing of the property has taken place,if any additional environmental conditions are discovered the following is provided: •The City has committed to placing $1M of the $2.55M purchase price in an interest bearing escrow account controlled by the City to front load unforeseen environmental conditions until BSRA reimbursement is received. How Does the PSA Relate to the Development Agreement? 14 DEVELOPMENT AGREEMENT Closing and EscrowDue Diligence Pre-Development Approvals Environmental Permits and Plans Lease Agreement Purchase and Sale Agreement OCTOBER 17, 2018 WHAT IS THE DEVELOPMENT AGREEMENT 15 Purpose: The Development Agreement will provide the terms and conditions under whichthedeveloperwilldeveloptheOaklandParkSquareProject. Why is it necessary: As illustrated in the previous slide,this agreement will survive the Purchase andSaleAgreementandgoverntheprojectafterthetransferoftheWestDixieLotsProperty,through construction,and up to Lease Commencement on the new CityHallspace. What are the Key provisions: Developer Timelines, Developer Obligations, City Obligations, Lease Terms, Default, Termination, and Remedies. DEVELOPMENT AGREEMENT SUMMARY Developer Timelines Day 1:Executed Contract 45 days from Contract Execution:Developer to File Pre-Development Review Application for Additional Building Height & Allocation of Flexibility Units 120 days from Contract Execution:Environmental Assessment Plan and Permitting No later than the expiration of the Inspection period:Long Term Lease to be executed by parties 16 DEVELOPMENT AGREEMENT SUMMARY Developer Timelines W/in 90 Days Inspection Period: Developer will file its Development Review Application with the City within ninety (90) calendar days of Inspection Period W/in 9 months of Development Application Date: Developer shall use commercially reasonable efforts to obtain the City Development Approval within nine (9) months after the Development Review Application Date. 18 Months from Development Review Application Approval: Developer to obtain all permits for construction Prior to Closing Memorandum of Closing 17 DEVELOPMENT AGREEMENT SUMMARY Developer Timelines CLOSING 60 calendar days after Developer has obtained City Development Approvals &permits,securing of construction financing ,or earlier date specified by written notice. 90 days from Closing:Commence construction work 30 Months from Closing:Substantial Completion 36 Months from Closing:Final Completion 120 Days after Project Final Completion Date:Developer to provide City with As-Built drawings for Civic Spaces and Infrastructure 18 DEVELOPMENT AGREEMENT SUMMARY DEVELOPER OBLIGATIONS •Design,Finance,Construct,and Complete the Oakland Park Square Project as defined in the agreement,to include the Parking Structure •Complete (at City Expense)Tenant Improvement for Civic Component •Market,Lease,and Operate the Development •Enter into Long Term Lease with the City as defined in the agreement 19 THE ELEMENTS OF THE DEVELOPMENT Residential Apartments 87 units Live/Work Rentals 11 units Ground Floor Retail/Commercial 34,600 sf City Hall Office and Public Space 29,000 sf Parking 343 spaces Height 68 feet 20 **Note a 5% variance is allowed per the agreement. This provision does not apply to the Height , City Hall Offices, and Parking THE ELEMENTS OF THE LEASE AGREEMENT CITY HALL LEASE: •29,000 square feet of office space on the ground floor and 6th floor of the South Block •Includes 133 public parking spaces of which 116 will be designated to City Hall in the South Block LEASE TERM: •Initial: 15 years •Option to Extended: Two (2) options to renew for 5-years LEASE RATE: Lease Years 1-5: $26.07 per sq.ft. Lease Years 6-8: $35.83 per sq.ft. Lease Years 9-10: $38.57per sq.ft. Lease Years 11-15: Mark to Market for Lease Year 11 Lease Years 12 & 13 at a fixed rate Lease Years 14 & 15 at a fixed rate Will come before Commission for approval prior to closing on the property.21 DEVELOPMENT AGREEMENT SUMMARY CITY OBLIGATIONS •If all Conditions Precedent to closing are met,Transfer the property •Provide Public Incentives as Defined in the Agreement •Enter into Long Term Lease with the Developer as defined in the agreement •Ensure timely review of the development applications and approvals. 22 DEVELOPMENT AGREEMENT SUMMARY Default,Termination ,and Remedies: During Inspection Period: •The City or the Developer can terminate the Agreement for reasons of Environmental Concern based on information obtained from the Environmental Consultant’s Assessment.The City and the Developer would share the cost of the Environmental Assessments and the City would retain all documents and studies for its future use. •It should be noted that the Developer may terminate the agreement during the inspection period,for reasons other than environmental. 23 DEVELOPMENT AGREEMENT SUMMARY Default,Termination,and Remedies: After Inspection Period and Prior to Closing of the PSA : •The City may Terminate the Development Agreement if the Developer Defaults.TheCity’s remedy would be to retain the Developer’s earnest Money Deposit of $100,000. •The Developer may terminate the Development Agreement if the City fails to providethenecessaryapprovals(this does NOT include pre -development approvals i.e.heightandtheallocationofflexibleunits)to support the development of the Project assubmittedpursuanttotheCity’s RFQ. •In the event development approvals are not provided by the City,the Developer wouldbeentitledtoreceive18monthsrent. 24 PURCHASE AND SALES AGREEMENT SUMMARY NEXT STEPS •If the PSA is approved this evening on second reading AND the Development Agreement is approved ;the Inspection Period under the PSA will begin. •Staff will begin working with Integra to finalize the Lease Agreement which will be brought back to this body. 25 26 OAKLAND PARK SQUARE