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HomeMy WebLinkAbout09-19JANUARY 27, 2009 09 -19 RESOLUTION (CARRIED 7 -0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVAL TO ENTER INTO AGREEMENT WITH OSHKOSH AREA ECONOMIC DEVELOPMENT CORPORATION FOR THE SALE OF COMMERCIAL /BUSINESS PARK LAND INITIATED BY: CITY ADMINISTRATION BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached Agreement for sale of commercial /business park lands between the City of Oshkosh and the Oshkosh Area Economic Development Corporation (OAEDC) is hereby approved, any changes in the execution copy being deemed approved by their respective signatures, and the proper City officials are authorized and directed to enter into same. OSHKOSH CHAMBER OF COMMERC ADVOCACY COMMUNITY DEVELOPMENT L EADERSHIP MEMORANDUM TO: City Manager Mark Rohloff FROM: Rob Kleman, Executive Director, Oshkosh Area Economic Development Corporation ( OAEDC) DATE: January 19, 2009 RE: Universal Business Park Update I want to thank you for giving the Oshkosh Area Economic Development Corporation ( OAEDC) the opportunity to partner with the City of Oshkosh over the past fifteen years in the development of Universal Business Park (UBP). Universal Business Park has become recognized as one of the highest quality professional office parks in the New North region. I will briefly summarize our efforts to date, along with the current developments in the park. The OAEDC Business Park Committee met recently with City staff and reviewed the past sales activity, market activity, and current pricing. We are making the following recommendations: LOTS IN BUSINESS PARK • That the pricing on lots 7 and 10 remain at $1.25 per square foot until January 31, 2011. However, the price structure may be reviewed and adjusted prior to January 31, 2011 by the City, in consultation with OAEDC, and upon approval of the Oshkosh Common Council. EXTERNAL BUSINESS PARK LOTS (HIGHWAY 44/91) • That the pricing on Lot 31 remain at $2.50 per square foot until January 31, 2011. However, the price structure may be reviewed and adjusted prior to January 31, 2011 by the City, in consultation with OAEDC, and upon approval of the Oshkosh Common Council. We believe that it would be prudent to maintain the current pricing levels given the current state of the economy, but we will continue to monitor market activity and recommend price adjustments accordingly. RECENT SALES ACTIVITY The OAEDC Business Park Committee and Board are happy to report strong sales activity in the park over the past two years. • OAEDC closed a 3.83 acre (Lots 16 and 17) sale on March 30, 2007 with Thomas James Real Estate for $166,564. Thomas James Real Estate has had excellent success with its Highway 44 Business Place development along Highway 44 and purchased these lots inside the Business Park to be positioned for future growth opportunities. • OAEDC closed a 1.02 acre parcel for $44,403 on April 20, 2007 with Huckleberry, LLC which resulted in the construction of a new 3,731 square foot office building for Ameriprise Financial. This project added $434,000 to the City's tax base. • OAEDC closed a 1.56 acre sale on June 8, 2007 with BCG Properties for $169,730 which resulted in the construction of a new 7,400 square foot Chiemsee Castle day care center at the corner of Highways 44/91. This project added $838,000 to the City's tax base. 1iue cj6Z - &4� I*J'� q &V- r I20 JACKSON STREET • OSHKOSH, WI 5490I • 920 -303 -2266. • FAX 920 -303 -2263 • info @oshkoshchamber.com • Most recently, OAEDC closed a 1 acre sale with AlexMadison, LLC for $57,132 for the construction of a new 3,000 square foot office building for the WHG Group. Construction is slated to begin this spring on this project and should add an additional $400,000 to the City's tax base. In summary, over the past two years, our efforts resulted in land sale revenue to the city of $437,829 and has the potential to add $4.2 million to the City's tax base. After the past two year's success, OAEDC has sold 42 of the 50 acres available in Universal Business Park with a total tax base of $14 million. Since 2003, we have sold over 28 acres with land sale revenue approaching $1.5 million. Since 1993, when the park opened, we have realized almost $2.2 million in land sale revenue with 15 Class A office buildings being constructed. At least one additional Class A office building will be constructed in 2009. Over 150 new jobs have been created in Oshkosh as a result of the Universal Business Park. BUSINESS PARK GOALS The OAEDC Business Park committee has taken a patient and consistent approach to the development of the park, and in certain instances has turned deals away because they have not met the standards outlined in the Protective Covenants. The City's stated goal was for OAEDC to sell on average one parcel per year. Over the past fifteen years, we have sold 28 parcels totaling 42 acres. The 42 acres have produced land sale proceeds to the City of nearly $2.2 million for an average per acre price of $52,370 or $1.20 per square foot. The Universal Business Park is now home to over 40 businesses located in fifteen Class A office buildings. Over 90,000 square feet of space has been developed that has added over $14 million to the City's tax base. BUSINESS PARK HISTORY In 1992, the City approached OAEDC regarding our interest in assisting with the marketing of the land behind the Prime Outlet Center. This land had been part of the Southwest Industrial Park and was selling for $25,000 per acre. Because of the commercial developments that were springing up in the area, the City determined that the highest and best use for this land was commercially oriented. So, in partnership with City staff, we formed the OAEDC Business Park Committee and began researching other community's office park developments. We found that other communities were having success in this area, with examples being Park Place in Appleton and the Waukesha Area Business Park. In 1992, Oshkosh had very few office park options, Bridgeview Center being the only dedicated office development in the City, which was considerably smaller than developments such as Park Place in Appleton. After surveying local businesses, it was confirmed that there was a need for a large -scale dedicated office park development to maintain a competitive balance with our neighboring communities. We then worked with a number of communities that had established a set of Protective Covenants for a Business Park similar in size to what we were planning. The idea behind the Protective Covenants was to create and maintain a long term -high quality environment that the tenants in the park could count on in the future. We ultimately worked very closely with the City of Waukesha and the Protective Covenants that they had established for their office park. The covenants, for example, require that all buildings be of masonry construction, require additional landscaping requirements, require higher setbacks than normal commercial or industrial zoning, and only allow specific office and business services types of uses. The covenants do restrict our tenant possibilities to a very narrow range of potential tenants. An example would be that the Universal Business Park covenants prohibit elderly retirement complexes, or any type of retail or manufacturing use. This is being done to maintain the integrity of the park and create a high quality image for the park. The OAEDC Business Park Committee then began analyzing the office market to determine the pricing structure for the park. The Business Park Committee is made up of volunteers who have committed many hours during our contract years with the City to assure that the Universal Business Park is a high quality development. Parcels in the park are currently priced anywhere from $1.25 per square foot to $2.50 per square foot depending on location. This translates into a per acre price of $54,450 - $108,900. MARKETING I would briefly like to explain our marketing efforts. When we began marketing the park in 1993, the City indicated that they would like to see OAEDC take a very "low key" approach to marketing the park in the local Oshkosh area. Therefore, the majority of our marketing efforts have been geared towards businesses from outside of the Oshkosh area. It is not the City's or OAEDC's sole intent to move businesses from one location in the City to another. The Universal Business park location is good for some businesses that are located in Oshkosh and may not be good for others. It is true that 80 percent of all economic development growth and expansion comes from within the local community. The Universal Business Park is no exception to this trend. Over time, we have seen a number of businesses locate in the park from outside of the Oshkosh area. This trend has continued with the construction of office space with "incubator type space" options ranging from 100 — 1,000 square feet in a number of Universal Business park buildings. We have also developed a business park brochure that we distribute to potential prospects. Over the past six years, we distributed nearly 5,000 of these brochures throughout the state of Wisconsin and Midwest through direct mail. We have also utilized telemarketing efforts and actual sales calls to promote the park. We have had on -going discussions with all of the commercial brokers in the Oshkosh area to make them aware of the development. In order to strike a strategic partnership with the brokerage community, any broker who brings a prospect forward to OAEDC is eligible for a share of the OAEDC Commission. This co- broker arrangement, which offers the broker 4% of the land sale, has been well received and has already been utilized on seven occasions. OAEDC plans to upgrade our advertising signage in the business park in 2009 at a cost of approximately $2,000. We have also advertised in a number of trade publications including Marketplace Magazine, Corporate Report, Midwest Industrial Properties, New North 13213 and Insight Magazine. SUMMARY In summary, OAEDC feels very fortunate to be involved with this development. We have received many positive comments regarding the high quality of this park from economic developmert officials from throughout the state of Wisconsin. We look forward to our continued partnership with the City of Oshkosh along with our other commercial development efforts. If you have any questions or comments, please feel free to give me a call at 303 -2265, extension 14. Thank you. Cc: Tom Belter, President, OAEDC Mike Dempsey, OAEDC Business Park Committee Chairman OAEDC Board of Directors Jackson Kinney, City of Oshkosh OAEDC UNIVERSAL BUSINESS PARK ACTIVITY/ LAND PRICING/RECOMMENDATION 2009 • The OAEDC Universal Business park Committee recommends to the Oshkosh Common Council to maintain the current pricing levels for the sale of land in Universal Business Park: BUSINESS PARK PROPER LOTS • Lots 7, 10, $1.25 per square foot • Price was increased from $1.00 to $1.25 in 2007 EXTERNAL BUSINESS PARK LOTS • Lot 31 $2.50 per square foot • Price was increased from $2.00 to $2.50 in 2007 Given the current state of the economy, the committee recommends that the current pricing levels should be maintained. RECENT ACTIVITY AND SALES HISTORY • Sold 7.5 acres since 2007 totaling $438,000 in Land Sale Revenue • Closed a 2.15 acre sale (Lots 13 and 14) with Provident Financial on December 28, 2006 for $91,596. • Provident constructed a new 4,926 square foot building professional office building. Project added $682,800 to the City's tax base • Closed a 3.83 acre sale (Lots 16 and 17) on March 30, 2007 with Thomas James Real Estate for $166,564. Thomas James Real Estate has had excellent success with its Highway 44 Business Place development along Highway 44 and purchased these lots inside the Business Park to be positioned for future growth opportunities. • Closed a 1.02 acre sale (Lot 12) on April 20, 2007 with Huckleberry, LLC for $44,403 which resulted in the construction of a new 3,731 square foot. office building for Ameriprise Financial. This project added $500,000 to the City's tax base. • Closed a 1.56 acre sale (Lot 30) on June 8, 2007 with BCG Properties for $169,730 which resulted in the construction of a new 7,400 square foot Chiemsee Castle day care center at the corner of Highways 44/91. This project added $800,000 to the City's tax base. • Closed a 1 acre sale (Lot 11) on October 31, 2008 with AlexMadison, LLC for $57,132 for the construction of anew 3,000 square foot office building for the WHG Group. Construction is slated to begin in the spring of 2009 and should add an additional $400,000 to the City's tax base. • With the latest 5 sales, we will have sold 42/50 acres available • Current total tax base over $14 million • $310,000 /year in additional property tax revenue accruing forever • Since 2003, over 28 acres sold at $1.5 million • Nearly $2.2 million in land sales since 1993 • So far, 15 Class A office buildings constructed with at least one more built in 2009 • Home to over 40 professional businesses AGREEMENT WHEREAS, the City of Oshkosh owns certain lands within the corporate limits of the City of Oshkosh and desires to sell such lands for business park development; and WHEREAS, the Oshkosh Area Economic Development Corporation, is a non - profit Wisconsin corporation committed to the economic development of the City of Oshkosh and having the means and ability to work toward the development of land for business park uses; NOW, THEREFORE, the City of Oshkosh, hereinafter referred to as the "CITY ", and the Oshkosh Area Economic Development Corporation, hereinafter referred to as " OAEDC," in order to work towards the commercial development of the following described properties, hereinafter referred to as the " BUSINESS PARK ", viz: A. Universal Business Park agree as follows: The City agrees: 1. That by these presents, for and in consideration of Ten Dollars ($10.00) in hand paid, receipt of which is hereby acknowledged from OAEDC, has agreed and does agree to hold until the thirty -first (31 st) day of January, 2011 at 12:00 PM, time being of the essence of this agreement, an option, subject to the order of OAEDC to purchase all of the premises owned by the City of Oshkosh known as and consisting of the following: A. Universal Business Park and the City of Oshkosh covenants to convey by Warranty Deed any portion of said property thereof at any time within the above time prescribed, to OAEDC or such person or persons as OAEDC may direct for and at the price as shown on "Attachment B ", payable on delivery of a Warranty Deed by the City, subject, however, to the further requirement that this option shall be of no effect and no rights shall inure to OAEDC or any other person or persons hereunder or by any purported exercise of this option, unless within the time written notice of exercise of this option shall be delivered to the City Attorney of the City. The purchase price attached hereto includes, for all the premises, graded, graveled and paved streets, street lights, sanitary sewer, water mains and storm sewers, as needed, and the extension of gas and electrical service, excluding laterals. 2. OAEDC a non - profit organization, agrees: (a) To attempt to work toward the commercial development of the land which is the subject matter of this agreement. (b) To sell land for uses as permitted in the approved Protective Covenants and in accordance with the 'Business Park Sales Policies and Guidelines" (see Attachment A "). (c) That they have adopted Protective Covenants for land sold hereunder and before any changes to said covenants are adopted, they will be submitted to the Oshkosh Common Council for review. OAEDC shall monitor the enforcement of these Covenants and if a breach occurs which requires repurchase, then in that event, OAEDC shall assign its right to repurchase to the City. 3. This agreement shall be terminable by either party by giving to the other party six (6) months written notice of its desire to terminate. IN WITNESS WHEREOF, the City of Oshkosh, Wisconsin, and OAEDC have respectively caused this Agreement to be duly executed on this _ day of , 2009. CITY OF OSHKOSH LIM And: Mark Rohloff, City Manager Pamela R. Ubrig, City Clerk STATE OF WISCONSIN ) )ss. WINNEBAGO COUNTY) OSHKOSH AREA ECONOMIC DEVELOPMENT CORPORATION And: Rob P. Kleman, Executive Director Thomas Belter, President Personally came before me this _ day of , 2009 the above named Mark Rohloff, City Manager, and Pamela R. Ubrig, City Clerk, of the City of Oshkosh, to me known to be the persons who executed the foregoing instrument and acknowledged same as and for said corporation, by its authority. Notary Public, Winnebago County, WI My Commission Expires: STATE OF WISCONSIN ) ) ss. WINNEBAGO COUNTY ) Personally came before me this _ day of , 2009, the above named Rob P. Kleman, Executive Director, and Thomas Belter, President, of OAEDC, to me known to be the persons who executed the foregoing instrument and acknowledged same as and for said corporation. Notary Public, Winnebago County, WI My Commission Expires: Approved as to form: Lynn Lorenson, City Attorney, Oshkosh, WI "ATTACHMENT A" CITY OF OSHKOSH BUSINESS PARK SALES POLICIES AND GUIDELINES The development of the Business Park within the City of Oshkosh is a continuance of a successful public - private partnership working for the communities benefit -- through job creation, economic growth, and expanded tax base. It represents the commitment by the community to provide a suitable setting for planned, orderly Business Park development to occur. The sales policies and guidelines described herein will be followed when land sales are considered in the City's Business Park. These policies and guidelines in combination with the Protective Covenants, are intended to promote the overall quality of development, to attract high quality, service related businesses, and to ensure that the Business Park remains a successful public investment. 1) OAEDC is designated as the exclusive agent regarding the sale of property in the City's Business Park. 2) All contacts and communications with prospects will be handled on a confidential basis. 3) Sales proposals will be considered for approval if, in the opinion of OAEDC, the project fits the development objectives of the City and OAEDC. 4) Land sales should be undertaken in such a manner so as to promote and encourage compact and orderly development of the business park and each individual parcel. The identification of sites should be done as to avoid the creation of remnant parcels and areas of irregular shape and size. OAEDC shall consult with City staff in the delineation of sites. 5) Any real estate broker, licensed to conduct business in the State of Wisconsin, who represents a prospect, shall become eligible for a sales commission not to exceed four percent (4 %) of the sale price, deducted from the commission paid to OAEDC, subject to the following terms: A. The Broker and prospect shall register in writing with OAEDC at 120 Jackson Street, Oshkosh, Wisconsin 54901, prior to any land sale negotiations. B. No commission will be paid to any broker for sale of land to a prospect who registered directly with OAEDC prior to contact with a broker. C. All land sale proposals and broker commission payments shall be approved by OAEDC. D. A broker - registered prospect shall remain on the active list for a period of six months, unless renewal is requested by the broker. "ATTACHMENT B" UNIVERSAL BUSINESS PARK PRICING STRUCTURE LOT PRICE PER SQ. FT. LOT AREA LOT PRICE PER SQ. FT. LOT AREA NO. NO. 1 SOLD 93,596.24 sq.ft 17 SOLD 79,613.31 sq.ft 2 SOLD 54,617.38 sq.ft. 18 SOLD 127,079.51 sq.ft 3 SOLD 48,212.12 sq ft 19 SOLD 57,611.33 sq.ft 4 SOLD 54,532.03 sq ft 20 SOLD 37,108.27 sq.ft 5 SOLD 51,829.53 sq.ft 21 SOLD 54,225.81 sq.ft 6 SOLD 54,670.34 sq.ft 22 SOLD 43,561.12 sq.ft 7 1.25 54,147.24 sq.ft 23 SOLD 39,321.52 sq.ft 8 SOLD 58,864.21 sq.ft 24 SOLD 41,937.01 sq.ft 9 SOLD 70,781.86 sq.ft 25 SOLD 42,313.52 sq.ft 10 1.25 67,070.86 sq.ft 26 SOLD 125,297.10 sq.ft 11 SOLD 51,254.46 sq.ft 27 SOLD 91,481.68 sq.ft 12 SOLD 42,463.25 sq.ft 28 SOLD 101,583.51 sq.ft 13 SOLD 43,067.93 sq.ft 29 SOLD 91,819.60 sq.ft 14 SOLD 53,746,26 sq.ft 30 SOLD 97,220.87 sq.ft 15 SOLD 53,819.25 sq.ft 31 2.50 294,030 sq.ft 16 SOLD 85,344.97 sq.ft NOTE- In the disnosition of oronerty in the Universal Business Park, lot lines and lot configurations may be adjusted from t1 shown on the attached site plan map. ose The City of Oshkosh reserves the right to reduce the prices herein established for individual parcels for good and sufficient reasons as determined by said City. OAEDC shall have the right to sell properties which are the subject matter of this agreement and shall receive sixteen percent (16 %) commission plus any reasonable costs for incidental expenses including land survey fees, attorney fees, engineering studies and soil tests, excluding environmental studies. Associated with said sale. Should the City determine to sell land for less than the scheduled price, then OAEDC's sixteen percent (16 %) shall be determined by the actual selling price. When land is repurchased by the City, due to nonimplementation of the project that had been proposed per its initial sale, OAEDC will be entitled, upon the resale of said land, to a sixteen percent (16 %) commission figured on the value of any increment that exists between the original sale price and the resale price, plus any reasonable costs for incidental expenses associated with said resale. The above schedule shall be in effect until January 31, 2011. However, the above price structure may be reviewed and adjusted prior to January 31, 2011 by the City, in consultation with OAEDC, and upon approval of the Oshkosh Common Council. "ATTACHMENT C" The "City of Oshkosh, Universal Business Park, Covenants and Restrictions" as on file in the Department of Community Development. :OAEDC business park agmt revised: 1105; 1/07;1/09 I a Ti