Placement: Resolutions
Action Requested: Motion / Vote
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Resolution 26-GFC-01, Authorizing the President or CEO to Enter into and Execute a Purchase and Sale Agreement between the Port St. Lucie Governmental Finance Corporation and Costco Wholesale Corporation, for a portion of Lot 2, Southern Grove Plat 45, totaling 22.8 acres of land.
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Submitted By: Jennifer Davis, Director, Community Redevelopment Agency
Executive Summary:
In June 2024, Costco Wholesale Corporation approached the City of Port St. Lucie, seeking to acquire land in Port St. Lucie to construct a membership warehouse club. Since that time, staff have been negotiating with Costco to refine the terms and conditions associated with the desired location in Southern Grove.
Presentation Information:
Staff will provide a brief presentation, if requested.
Staff Recommendation:
Move that the Board approve the Resolution authorizing the President or CEO to execute the Purchase and Sale Agreement with Costco Wholesale Corporation.
Alternate Recommendations:
1. Move that the Board amend the recommendation and approve the Resolution authorizing the President or CEO to execute the Purchase and Sale Agreement with Costco Wholesale Corporation.
2. Move that the Board not approve the Resolution and provide staff with direction.
Background:
Over the last several years, the Southern Grove Jobs Corridor has become a reality. The next phase of implementing the Southern Grove Master Plan is to focus on key retail sites within Southern Grove and to complete the necessary infrastructure to support the new businesses. In June 2024, Costco Wholesale Corporation approached the City of Port St. Lucie, seeking to acquire land to construct a membership warehouse club. Since that time, staff have been negotiating with Costco to refine the terms and conditions associated with the desired location in Southern Grove. The location is adjacent to the Costco Distribution Depot, a 1.8 million square foot distribution facility serving all of Florida. The Depot is anticipating opening the first phase of that project in the coming weeks.
Issues/Analysis:
The general terms of the Purchase and Sale Agreement (PSA) are outlined as follows:
Purchase Price:
$6,000,000, which equates to @ $6.04 per square foot for ±22.8 acres of land.
Deposit:
$300,000 due within ten (10) days of execution of the PSA
Permitted Use:
This transaction provides for 22.8 acres to be developed with up to 170,000 square feet of Retail use only, in accordance with the Southern Grove DRI Amended and Restated Development Order. The Buyer intends to develop a wholesale and retail general merchandise facility which may include a pharmacy, liquor sales, photo processing, butcher, deli and bakery services, optometry services, hearing aid center, tire sales and installation center, propane sale and fueling center, vehicle fueling facility, a car wash, related office space, related parking and other improvements.
Inspection Period:
Ninety (90) days.
Approval Period:
The Buyer shall have two hundred seventy (270) days after the expiration of the Inspection Period to obtain all necessary approvals, as specifically outlined in Section 7 of the PSA.
Closing:
The Closing shall take place within thirty (30) days after expiration of the Approval Period.
Covenant to Open and Operate:
Consistent with other GFC transactions, in the event the Buyer sells any portion of the Land to an unaffiliated party prior to constructing and opening a building, GFC would receive participation in the sales revenue.
Financial Information:
Upon Closing, the Buyer will assume all carry costs associated with the land.
Special Consideration:
The GFC will retain ownership of two other “carve-out” parcels within the current Lot 2, Southern Grove Plat 45. The first is a 2.63 +/- acre tract at the southeast corner of SW Marshall Parkway and SW Village Parkway. The second is a 7.66 +/- acre site at the southern tip of existing Lot 2.
The Seller has agreed to the following work prior to Closing (“Seller’s Work”):
• Cause, at its sole cost and expense, the construction of the extension of Marshall Parkway such that it is open to the public as a public right-of-way as necessary for the certificate of occupancy to be issued for the Permitted Use.
• provide written confirmation that City water, sewer and utilities are located adjacent to the Land and, upon payment of any applicable tap-on fees, will be available for connection as part of Buyer’s development of the Permitted Use.
• provide approximately 40,000 cubic yards of fill dirt reasonably acceptable to Buyer for use in grading and filling the Land.
In addition, there are certain Seller restrictive covenants tied to the PSA that shall survive Closing. Said restrictive covenants specifically restrict land sales by the Seller or Seller’s entities within a one (1) mile radius of the property, which are not located in a Community Redevelopment Area, for the purpose of being developed or operated as the following:
• A wholesale or retail general merchandise facility (ex: Sam’s, BJ’s, etc)
• Retail grocery / delivery service
• Alcoholic Beverage retailer
• Walmart / Walmart Supercenter
• Car wash
• Motor vehicle fuel or service station
• Motor vehicle tire sales / installation
There are also certain risks and liabilities associated with the PSA. If Seller fails to perform required obligations of the PSA or complete Seller’s Work, Buyer can provide notice of default; if not cured within 10 days, Buyer can claim damages up to $500,000, including out-of-pocket expenses and litigation fees. For Seller’s default, Buyer generally has the right to all remedies at law and equity subject to the $500,000 damages cap provided in the PSA. In cases of Seller’s willful misconduct/bad faith in performing its contractual obligations, however, unlimited damages may be awarded to Buyer.
Location of Project:
Southeast quadrant of SW Village Parkway and SW Marshall Parkway, west of Anthony F. Sansone Sr. Blvd.
Attachments:
1. Resolution
2. Exhibit “A” to Resolution - Purchase and Sale Agreement with Exhibits
3. Location Map
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: 25247-01
Legal Sufficiency Review:
Reviewed by Margaret M. Carland, Senior Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.