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HomeMy WebLinkAbout42. 13-49 JANUARY 22, 2013 13-49 RESOLUTION (CARRIED___7-0_____LOST________LAID OVER________WITHDRAWN________) PURPOSE: APPROVE AGREEMENT WITH THE OSHKOSH CHAMBER OF COMMERCE FOR THE SALE OF LAND IN THE UNIVERSAL BUSINESS PARK INITIATED BY: CITY ADMINISTRATION BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached Agreement for sale of lands with the Universal Business Park between the City of Oshkosh and the Oshkosh Chamber of Commerce 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. City of Oshkosh (0 Community Development Department Or 215 Church Avenue, Oshkosh, WI 54901 ON THE WATER TO: Honorable Mayor and Members of the Common Council FROM: Allen Davis, Community Development Director DATE: January 18, 2013 SUBJECT: Chamber Agreement for Universal Business Park Land Sales BACKGROUND In the past, OAEDC has provided the City with land marketing, sales and administrative services for the City's Universal Business Park. Since OAEDC was recently integrated or merged with the Chamber, the Chamber would then be responsible. This agreement is a 1 -year renewal of that agreement with a 30 -day termination notice. ANALYSIS OAEDC has provided sales and administrative services for the City's business park for many years. OAEDC was compensated for their efforts with a 16% commission on lot sales. With the proposed agreement, the Chamber would not receive a commission for land sales; however, other real estate agents would receive a 4% commission. OAEDC staff has worked closely with prospects and City -staff regarding site planning, permitting, financing and closings. OAEDC had also administers the restrictive covenants in the business park regarding appearance, building additions and possible accessory uses. The Chamber would now be responsible for these activities. The 30- day termination clause is needed in light of the effort to create a public private economic development partnership in the near future. FISCAL IMPACT All commissions would be based on lot sales and is not included in the 2013 budget. RECOMMENDATION The City Council approves the Agreement as presented. Approved, City Manager 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 City had previously entered into a series of agreements with Oshkosh Area Economic Development Corporation, 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; and WHEREAS, an "Organizational Analysis and Direction" report was prepared by the Prager Team to examine Oshkosh's existing economic development structure and recommended a new public- private economic development partnership be created; and WHEREAS, Oshkosh Area Economic Development Corporation has recently consolidated with the Oshkosh Chamber of Commerce and the Oshkosh Chamber of Commerce wishes to continue to provide the services previously provided by the Oshkosh Area Economic Development Corporation during the transition to a new public- private economic development entity. NOW, THEREFORE, the City of Oshkosh, hereinafter referred to as the "CITY ", and the Oshkosh Chamber of Commerce, hereinafter referred to as "Chamber," 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: 1. The City agrees that by these presents, for and in consideration of Ten Dollars ($10.00) in hand paid, receipt of which is hereby acknowledged from Chamber, has agreed and does agree to hold until the thirty -first (31 st) day of December, 2013 at 12:00 PM, time being of the essence of this agreement, an option 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 Chamber or such person or persons as Chamber 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 Chamber 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. 1 2. Chamber, 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) OAEDC had adopted Protective Covenants for land sold hereunder and that any rights and responsibilities regarding the Protective Covenants have been assumed by Chamber and before any changes to said covenants are adopted, they will be submitted to the Oshkosh Common Council for review. Chamber shall monitor the enforcement of these Covenants and if a breach occurs which requires repurchase, then in that event, Chamber shall assign its right to repurchase to the City. 3. This Agreement may be assigned to a successor organization with written consent of the City, which shall be given by the City Manager. 4. THIS AGREEMENT shall be terminable by either party by giving to the other party thirty (30) days written notice of its desire to terminate. Within ten (10) days of receipt of written notice to terminate from the City, Chamber shall provide to City a list of all prospective land buyers with whom Chamber is working as of the date of termination ( "Prospective Buyers "). Pursuant to paragraph (5) of Attachment A to this Agreement, any real estate broker entitled to a commission under the terms of that paragraph, shall be entitled to commissions pursuant to the terms of this Agreement on any consummated land sale to a Prospective Buyer within one (1) year of termination of this Agreement. IN WITNESS WHEREOF, the City of Oshkosh, Wisconsin, and Chamber have respectively caused this Agreement to be duly executed on this day of January, 2013. CITY OF OSHKOSH OSHKOSH CHAMBER OF COMMERCE Mark Rohloff, City Manager And: Pamela R. Ubrig, City Clerk 2 :I. John Casper, CEO & President Vicki Updike, Chairperson STATE OF WISCONSIN ) ss. WINNEBAGO COUNTY ) Personally came before me this day of January, 2013, the above named John Casper, CEO & President, and Vicki Updike, Chairperson, of the Oshkosh Chamber of Commerce to me known to be the persons who executed the foregoing instrument and acknowledged same as and for said corporation. STATE OF WISCONSIN )ss. WINNEBAGO COUNTY) Notary Public, Winnebago County, WI My Commission Expires: Personally came before me this day of January, 2013 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. Approved as to form: Lynn Lorenson, City Attorney, Oshkosh, W I 11 Notary Public, Winnebago County, WI My Commission Expires: "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) Chamber 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 Chamber, the project fits the development objectives of the City and Chamber. 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. Chamber 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, to be paid by the City from the proceeds of the sale, subject to the following terms: A. The Broker and prospect shall register in writing with Chamber 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 Chamber prior to contact with a broker. C. All land sale proposals and broker commission payments shall be approved by Chamber. 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. LOT AREA LOT PRICE PER SQ. LOT AREA NO. FT. NO. FT. 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 s q ft 20 SOLD 37,108.27 sq.ft 5 SOLD 51,829.53 sq.ft o- µ 21 SOLD 54,225.81 sq.ft 6 SOLD 54,670.34 sq.ft N 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 RAN �Z 25 SOLD 42,313.52 sq.ft 10 1.25 67,070.86 sq.ft 26 SOLD 125,297.1 D 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 w. 29 SOLD 91,819.60 sq.ft 14 SOLD 53,746.26 sq.ft :. 30 SOLD 97,220.87 sq.ft q. 15 SOLD 53,819.25 sq.ft 31 2.50 294,030 sq.ft 16 SOLD 85,344.97 sq.ft 70-. NOTE: In the disposition of property in the Universal Business Park, lot lines and lot configurations may be adjusted from those shown on the attached site plan map. 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. Chamber shall have the right to sell properties which are the subject matter of this agreement for the consideration specified in this agreement and shall not receive a commission but the City will reimburse Chamber for its reasonable costs for incidental expenses including land survey fees, attorney fees, engineering studies and soil tests, excluding environmental studies associated with said sale. The above schedule shall be in effect until December 31, 2013. However, the above price structure may be reviewed and adjusted prior to December 31, 2013 by the City, in consultation with Chamberor upon termination of this Agreement as provided herein 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 Agreement revised: 1105; 1/07; 1 /09; 1111; 1/13 N. OSHKOSH CHAMBER OF COI)IINTERCE ADvoCACY Co:vniu mn (lE T-LonmiizNT LEADERSHIP MEMORANDUM TO: Honorable Mayor and Members of the Common Council FROM: Rob Kleman, Sr. Vice President, Economic Development, Oshkosh Chamber of Commerce DA T F: January 17, 2013 RE: Universal Business Park Update We have had the opportunity to meet with Allen Davis to discuss the.continuation of the Universal Business Park land sale contract. Based oil the recent consolidation of OAEDC into the Oshkosh Chamber, any future contracts would be held -with the Oshkosh Chamber. As the City transitions economic development programming the Oshkosh Chamber is offering to provide all aspects of the land sale contract activities with no commission fees until such time the City determines its long range plan relative to the marketing of Universal Business Park. All expenses relating to the closing of a particular land transaction would continue to be City expenses, as they have in the past, as well as any co-broker commission fees which would amount to 4% of sale, Also, we want to thank you for the opportunity to partner with the City of Oshkosh over the past twenty 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. Following is a summary of our efforts to date, along with the current developments in the park. In our current discussions with City staff, we reviewed the past sales activity, market activity, and current pricing. We are making the following recommendations; LOTS IN BUSINLSS PARK • That the pricing on lots 7 and 10 remain at $1.25 per square foot until January 31, 201 S. However, the price structure could be reviewed and adjusted prior to January 31, 2015 by the City of Oshkosh and upon approval of the Oshkosh Common Council. EXTERNAL BUSINESS PARK LOTS (HIGHWAY 44191) • That the pricing on Lot 3I remain at $2.50 per square foot until January 31, 2015. However, the price structure could be reviewed and adjusted prior to January 31, 2015 by the City of Oshkosh and upon approval of the Oshkosh Common Council. FORMER ROADWAY EXPRESS PARCEL (1-1)[GHWA'Y' 44) • That the pricing on lot 33 remain at $2.50 per square foot until January 31, 2015. However the price structure could be reviewed and adjusted prior to January 31, 2015 by the City of Oshkosh and upon approval of the Oshkosh Common Council. We believe that it would be prudent to maintain the current pricing levels given the current market conditions, but we will continuo to monitor market activity and recommend price adjustments accordingly. 120 JAC14SON ST] U • OSHKOSH, M 54901 • 920.303 -2266 4 PAX. 92o- 3o3 -z263 • info@ oshkoshchambercom UNIVERSAL BUSINESS PARK ACTIVITY While there have not been any direct City land sales in Universal Business Park since 2008, there has been a significant amount of activity in the park from a private sector perspective relative to previously sold parcels. A number of parcels have been privately sold and a number of new office buildings were constructed in the park. Following is a review of some of the activity in the park over the past six years: • Closed a 3.83 acre (Lots 16 and 17) sale on March 30, 2007 with Thomas James Roal 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 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 $412,300 to the City's tax base. • 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 44191. This project added $796,400 to the City's tax base. • Closed a I acre sale with AlexMadison, LLC on October 31, 2008 for $57,132 for the future construction of a new office building. • Construction was completed on a new 37,600 square foot Corporate Headquarters office for CitizensFirst Credit Union in August of 2010. This project has added over $6 million to the City's tax base. This project was an expansion from the original branch office that was built in UBP in 1993. • Construction was completed on a new 8,717 square foot office building for Dei natology Associates of Wisconsin in September of 2010. This project has added over $1.5 million to the City's tax base and created up to 10 new jobs. • WisDOT located its Highway 41 construction project offices in Universal Business Park in the office building located at the corner of Universal and Highway 44 during the Highway 41 construction project. • The USDA moved into the vacant 4,200 square foot office building located. at 2490 Enterprise Drive. • CESA 6 expanded and moved its offices into the 8,000 square foot building located at 2935 Universal Court. Since 1993, when the park opened, the City has realized $2,171,243 in land sales, From this, OAEDC has earned $267,062 in commissions, private broker commission fees paid were $37,887, and land closing fees were $43,805, for a net total to the City of Oshkosh of $1,822,489. We have sold 42 of the 50 original acmes available in the park with a current total tax base of $19,445,400. Two new Class A office buildings were constructed in 2010 and 16 Class A office buildings have been constructed overall. Over 300 new jabs have been created in Oshkosh as a result of the Universal Business Park and the park is currently experiencing over a 90% occupancy rate based upon a recent survey we conducted. In 2011, we assisted the City in negotiating, coordinating and planning for the purchase of the former Roadway Express terminal adjacent to the business park. This 8.5 acre parcel was ultimately purchased by the City and is now pall of the existing business park. A temporary lease was secured with Oshkosh Corp. which provided them the opportunity for vehicle storage. Demolition on the existing building was completed in December of 2012 and final site preparation activities will be occurring into the spring of 2013. We also worked closely with City staff in the summer of 2012 regarding covenant monitor and enforcement activities and entry way signage maintenance activities. BUSINESS PARK GOALS The 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 to sell on average one parcel per year. Over the past twenty years, we have sold 28 parcels totaling 42 acres. The 42 acres have produced land sales to the City of almost $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 sixteen Class A office buildings. Over 136,000 square feet of space has been developed that has added close to $19.5 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 Horizon Outlet Mall. This land had been part of the Southwest industrial i'ark and was selling for $25,000 per acre. Because of the commercial developments thatwere springing up in the area, the City determined that the highest and best use for this laud was commercially oriented. So, in partnership with City staff, we formed the Universal Business Park Committee which includes the City Manager and Community Development Director. We 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 senior 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 patient and orderly 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 our 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 eight 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 is eligible for a share of the project commission. This co- broker arrangement, which offers the broker 4% of the land sale, has been well received and has been utilized on eight occasions with total fees paid of $37,887. We also upgraded our advertising signage in the business park in 2012 at a cost of approximately $2,000. We have also advertised our available sites in a number of trade publications over time. SUmm"Y In summary, we have felt very fortunate to be involved with this very successful development. We have received many positive comments regarding the high quality of this park from prospects and economic development officials fiom throughout the state of Wisconsin. If you have any questions or comments, please feel free to give me a call at 303 -2265, extension 14. Thank you, Cc: Mike Dempsey, Universal Business Park Committee Chair Vicki Updike, Chair, Oshkosh Chamber Board of Directors John Casper, President and CEO, Oshkosh Chamber of Commerce Mark Rohloff, City Manager, City of Oshkosh Allen Davis, Director of Community Development, City. of Oshkosh _ o e Y y CIS cU E6 o A g 0 U1 o a3 N W Es G= q?s c 4 ■ _ t ■ _ e o LL G3 ,•-- �•} to a- CO R K y0 CY ro t •'R nv _ e Goo Goo cot, �ti �L C U mw n Q w E . f Y V i � nu U E ' �� N �j o 4 } S U • 't�" � E—. � F+'l -u �M C� s a1 r 2 Q df Li O� F� Q i •'L4iEF-- P.'l��i • 1 � s (Q W t + �l � `Jib 7 ` �_ W F s r + Ncp U tim or' Nrn "U �� F r NFL q2 iv)a F sl co Q U -��Ee tiN e cq � m s• eb ��♦ � � � f % t rE t [ i t i E ... r tom N M 4 1 ! i S t � l ; U Q N nt E 1411 E