TO: Urban Renewal Agency Board
THROUGH: Steve Powers, Executive Director
FROM: Kristin Retherford, Director Urban Development Department
SUBJECT:
title
Real estate purchase option agreements with Union Gospel Mission of Salem, Oregon and John Saffron, Argo Investment Corporation, and the Gassner-Saffron Trust.
Ward(s): 1
Board Member(s): Kaser
Neighborhood(s): CANDO
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ISSUE:
Shall the Agency adopt Resolutions No. 17-8 URA and No. 17-9 URA authorizing the Executive Director to execute real estate purchase option agreements with Union Gospel Mission of Salem, Oregon and John Saffron, Argo Investment Corporation, and the Gassner-Saffron Trust?
RECOMMENDATION:
recommendation
Adopt Resolutions No. 17-8 URA and No. 17-9 URA authorizing the Executive Director to execute real estate purchase option agreements with Union Gospel Mission of Salem, Oregon and John Saffron, Argo Investment Corporation, and the Gassner-Saffron Trust.
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SUMMARY AND BACKGROUND:
Union Gospel Mission of Salem, Oregon (UGM) (singularly) and John Saffron, Argo Investment Corporation, and the Gassner-Saffron Trust (Saffron) (collectively) listed multiple parcels of real estate for sale in the downtown Salem block bounded by Commercial Street NE, Chemeketa Street NE, Front Street NE, and Center Street NE (Attachment 1). The combined property represents a substantial redevelopment opportunity and is a gateway to downtown from the north and west.
FACTS AND FINDINGS:
Staff and UGM/Saffron have come to terms on proposed purchase option agreements (Exhibits to the Resolutions) for Agency acquisition of real property. Due to concerns regarding timing of the property transfer, the sellers’ concerns regarding flexibility, interest from third parties, and the due diligence involved, staff and the sellers’ broker determined an option agreement was the most prudent means to place the property under contract. Key terms of each agreement are below.
UGM
Option Fee: $77,500, credited toward purchase price
Option Term: nine months
Purchase Price: to be determined by appraisal, but no less than $1,500,000
Appraisal Cost: split evenly by both parties
Recently Appraised
Value: $1,515,000 (December 2015)
Size: 1.1 acres on four tax lots, 30,986 square feet of improvements
SAFFRON
Option Fee: $112,500, one half credited toward purchase price
Option Term: nine months
Purchase Price: to be determined by appraisal, but no less than $2,000,000
Appraisal Cost: split evenly by both parties
Recently Appraised
Value: $1,960,000 (August 2016)
Size: 1.03 acres on six tax lots, 31,419 square feet of improvements
During the option period, staff will complete all required due diligence including completion of a Phase I Environmental Site Assessment (ESA) and a Phase II ESA if required.
Once due diligence is complete, staff will prepare a Purchase and Sale Agreement with each party for approval by the Agency Board should it desire to purchase the property.
Per Agency rules, real estate option agreements require the Agency Board to approve the agreement through adoption of a resolution. Resolution 17-8 URA (Attachment 2) and Resolution 17-9 URA (Attachment 3) for the UGM and Saffron properties, respectively, are attached.
Clint Dameron
Real Property Services Manager
Attachments:
1. Location Map
2. Resolution 17-8 URA - UGM
3. Resolution 17-9 URA - Saffron