TO: Mayor and City Council
THROUGH: Keith Stahley, City Manager
FROM: Dan Atchison, City Attorney
SUBJECT:
title
Second amendment to the purchase and sale agreement between the City and Green Light-Home First, LLC for the sale of the former Salem General Hospital site.
Ward(s): Ward 1
Councilor(s): Councilor Stapleton
Neighborhood(s): Northeast Neighbors Neighborhood Association
Result Area(s): Safe and Healthy Community; Safe, Reliable and Efficient Infrastructure; Welcoming and Livable Community.
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SUMMARY:
summary
The proposed second amendment to the purchase and sale agreement would lower the purchase price of one of the two parcels (Phase 1) from $3,000,000 to $2,700,000 and increase the purchase price of the other parcel (Phase 2) from $633,000 to $933,000. The change is being requested to correspond to the appraised value for the Phase 1 property as determined by Green Light’s lender.
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ISSUE:
Shall City Council authorize a second amendment to the purchase and sale agreement between the City (Seller) and Green Light-HomeFirst, LLC (Buyer) to decrease the purchase price of one of the parcels and increase the purchase price of the other parcel to accommodate the financing requirements for Buyer.
RECOMMENDATION:
recommendation
Authorize a second amendment to the purchase and sale agreement between the City (Seller) and Green Light-HomeFirst, LLC (Buyer) to decrease the purchase price of one of the parcels and increase the purchase price of the other parcel to accommodate the financing requirements for Buyer.
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FACTS AND FINDINGS:
At the July 8, 2024 City Council meeting, Council authorized the first amendment to the purchase and sale agreement for property located off 23rd Street, NE between D Street and Center Street. Attachment 1 - site map. The City initially acquired this property from Salem Health to facilitate Green Light-HomeFirst’s development of the property for affordable housing.
The first amendment allowed the City to retain the approximately 1-acre “conservation area,” and modified closing to allow Buyer to close on a portion of the property (Phase 1) first, and then close later on the remainder of the property (Phase 2), in order to allow the parties to complete a partition of the property to create legal lots. The first amendment provided for a purchase price of $3,000,000 for Phase I and $633,000 for Phase 2.
Buyer has informed the City that the lender’s appraisal for Phase I came in at approximately $2.7 million, which is approximately $300,000 less than the purchase price. Buyer has asked the City to modify the purchase prices on the Phase 1 and Phase 2 properties, so that the Phase 1 purchase price will be $2.7 million (consistent with the appraised value), and the Phase 2 purchase price will increase to $933,000. As consideration for this change, upon execution of the second amendment, Buyer will deposit a promissory note for $100,000 into escrow for Phase 2, which will be non-refundable upon expiration of Buyer’s contingencies.
BACKGROUND:
The City utilized affordable housing bond proceeds to acquire this property from Salem Health for approximately $3,800,000. Upon sale of the property to Green Light-HomeFirst, the sale proceeds will be returned to the bond fund and may be utilized for additional projects consistent with the bond.
Dan Atchison
City Attorney
Attachments:
1. Site Map - Subject Property.