Placement: Second Reading of Ordinances / Public Hearing
Action Requested: Motion / Vote
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Ordinance 20-51, Public Hearing, An Ordinance Approving the Release of the Reverter Clause and Waiving Compliance with the Post-Closing Employment and Development Covenants Applicable to White Aluminum Fabrication.
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Submitted By: Elijah Wooten, Business Navigator
Strategic Plan Link: The City's Goal of a diverse local economy and employment opportunities.
Executive Summary (General Business): On August 24, 2020, the City Council directed the City Manager and City Attorney to prepare an ordinance to release the reverter clause and compliance with the post-closing employment and development covenants applicable to White Aluminum Fabrication, conditioned on the sale of the 6.10-acre parcel to Total Truck Parts.
Presentation Information: A brief presentation by Elijah Wooten, Business Navigator
Staff Recommendation: Move that the Council approve the ordinance to release the reverter clause and post-closing employment and development covenants applicable to White Aluminum Fabrication, conditioned on the sale of the 6.10-acre parcel to Total Truck Parts.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the ordinance to release the reverter clause and post-closing employment and development covenants applicable White Aluminum Fabrication, conditioned on the sale of the 6.10-acre parcel to Total Truck Parts.
2. Move that the Council not approve the ordinance to release the reverter clause and post-closing employment and development covenants applicable to White Aluminum Fabrication and provide staff direction.
Background: In 2008, the City of Port St Lucie deeded Parcel 2 within LTC Ranch Industrial Park to White Aluminum Fabrication pursuant to a Purchase and Sale Agreement. The Agreement contained employment and development post-closing covenants. If the company did not construct improvements within twenty-four months after the issuance of a building permit, the property would revert to the City of Port St Lucie. The Agreement also contained a financial penalty if the company failed to meet its employment obligations. White Aluminum Fabrication obtained site plan approval and invested in site work and infrastructure improvements. However, due to the Great Recession the company cancelled its relocation to Port St Lucie. Since a building permit was not issued, the reverter clause was never enacted based on the post-closing development covenant contained within the Purchase and Sale Agreement. The property is now under contract with Total Truck Parts, a distributor of truck parts, and a qualified targeted industry in the State of Florida and St Lucie County. Total Truck Parts intends to build a 46,800 square foot distribution facility with a projected capital investment of $3.3 million. The expansion will retain 16 existing employees and create 10 new jobs paying an average wage of $63,000 plus benefits, which equates to 160% of St Lucie County’s average wage. Based on the amount of capital investment and land acquisition cost, Total Truck Parts does not want to purchase the 6.10-acre parcel with the reverter clause and post-closing employment and development covenants.
Issues/Analysis: The Purchase and Sale Agreement between White Aluminum Fabrication and Total Truck Parts for the 6.10-acre parcel has a sales price of $630,000. White Aluminum Fabrication indicated the sale of the property to Total Truck Parts would allow the company to recoup the cost incurred to improve the site and obtain approvals to build the project. The City Council requested the company provide proof of payment of the investment made to improve the site and obtain approvals for the project to be reviewed and approved by staff prior to the preparation of the ordinance to waive the reverter clause and post-closing employment and development covenants.
Financial Information: As a condition of the waiving of the reverter clause and compliance with the post-closing employment and development covenants, White Aluminum Fabrication agrees to a payment of one hundred eight thousand seven hundred and thirty-three dollars ($108,733) from the sale proceeds at closing. The City agrees to waive the $260,000 employment penalty contained within the post-closing employment covenant in the Purchase and Sale Agreement for White Aluminum’s failure to provide the jobs it contracted to provide. The waiver and payment would only occur if the property is sold to Total Truck Parts.
Special Consideration: Total Truck Parts lease at their Fort Pierce location expires at the end of 2021. The company has outgrown their currently facility and is actively engaged in the site selection process. In addition to purchasing the 6.10-acre parcel clear of encumbrances, the company will also require the special exception use be approved prior to the closing of the sale.
Location of Project: LTC Ranch PUD #1 (PB 40-1) Parcel 2
Attachments:
1. Verification of expenditures and proof of payment from White Aluminum
2. Ordinance
3. Negotiate Sale Letter
4. Expenditure Analysis
5. Presentation
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 5091
Legal Sufficiency Review:
Reviewed by Margaret M. Carland, Deputy City Attorney. Approved as to Legal form and sufficiency by James D. Stokes, City Attorney.