Title
Eastland Yards Master Development Agreement Amendment
Action
Action:
A. Authorize the City Manager, or his designee, to negotiate and execute a contract amendment to the Master Development Agreement with C4 Development, LLC (a Crosland Southeast Affiliate) to amend terms associated with the purchase price, transaction process, and schedule outlined in the conveyance of options to C4 Development, LLC for the purchase of certain portions of real property (hereinafter “Private Development Parcels”) defined in the Master Development Agreement and located along Central Avenue between North Sharon Amity Road and Wilora Lake Road, commonly known as the Eastland Yards,
B. Authorize the City Manager, or his designee, to amend the contract consistent with the purpose for which the contract and this amendment were approved, and
C. Adopt a resolution amending the Master Development Agreement with C4 Development, LLC.
Body
Staff Resource(s):
Shahid Rana, Economic Development
Todd DeLong, Economic Development
Background
§ The city purchased approximately 80.4 acres of the former Eastland Mall property in August 2012 as an opportunity to aid economic development and neighborhood revitalization in the area. The mall structure was demolished in 2013.
§ In September 2018, the Economic Development Committee voted unanimously (Mitchell, Driggs, Harlow, Mayfield, Newton) to direct staff to engage exclusively with the development team led by Crosland Southeast, LLC (Developer) to work through the terms of a pre-development agreement, which would outline the necessary site work to start a joint redevelopment effort between the city and the development team.
§ Throughout 2019, the city partnered with the Developer to lead a robust and broad outreach effort for more inclusive community engagement.
§ In June 2020, City Council approved rezoning the city’s approximately 69 acres as well as an additional 7.96 acres under contract by the Developer located at 5745 Central Avenue in Council District 5.
§ On November 9, 2020, City Council authorized the City Manager to negotiate and execute a Master Development Agreement as well as the necessary agreements for the reimbursement of costs for public infrastructure, public parking, and other public improvements.
§ On May 31, 2022, City Council adopted a resolution to approve the conveyance of real property as outlined above and in the Master Development Agreement.
§ The Master Development Agreement contemplates the transfer of Private Development Parcels that have been identified by the city and the Developer to be ready for development in accordance with the following terms:
- The city will convey to the Developer options to purchase certain portions of real property comprising approximately 26.7 acres.
- The Developer shall deliver to the city a written notice specifying the Private Development Parcels to be acquired in fee simple and the closing date for such conveyance.
§ The closing date must occur within 60 to 90 days from the date of the notice.
§ With each notice the Developer shall deposit 10 percent of the purchase price of the applicable parcels subject to the conveyance as earnest money.
§ To keep the option to purchase from terminating, each of the following must be satisfied:
- The closing on the initial acquisition must occur no later than December 31, 2023, and include a minimum of five acres.
- Thereafter, within 24 months after the initial acquisition, and within 18 months after each subsequent acquisition, Developer must close on at least one additional acquisition comprised of at least two acres.
- Developer must acquire all parcels no later than 60 months from the date of the initial acquisition.
- The initial purchase price for parcels conveyed to Developer on or before August 31, 2025, shall equal $3.19 per square foot of net land area within the parcel(s) conveyed.
§ The purchase price for all parcels conveyed after August 31, 2025, shall equal the greater of the initial purchase price or the then Fair Market Value determined by the parties or three licensed real estate appraisers as defined in the Master Development Agreement.
§ The purchase price for the parcels reserved for use as single-family residences shall remain the same as the initial purchase price.
- The city will have the right to reacquire conveyed parcels in the event of the failure to commence or complete the designated improvements on any parcel in accordance with the Master Development Agreement.
- The Private Development Parcels shall be developed for various uses, which may include for-sale residential, commercial, market rate rental residential, and senior housing rental residential; the senior housing rental component shall be comprised of a minimum of 70 senior affordable units with affordability targets between 30 and 80 percent of Area Median Income with specific unit sizes and numbers as designed and required by the North Carolina Housing Finance Agency.
- Before beginning construction on any parcel, Developer must submit construction plans to the city for its review in accordance with the Master Development Agreement.
§ The Developer has acquired 13.45 acres of the redevelopment property and there are approximately 12.7 acres remaining to be acquired.
Explanation
§ The proposed amendment will reflect the following changes to the Master Development Agreement:
- Purchase price extension:
§ Current: The purchase price for Private Development Parcels conveyed to the Developer on or before August 31, 2025, shall equal $3.19 per square foot of net land area.
§ Amendment: Private Development Parcels with Private Improvement Agreements executed on or before August 31, 2027, shall be conveyed to the Developer at a purchase price of $3.19 per square foot of net land area.
- Transaction process:
§ Current: Developer may close on more than two acres at any closing.
§ Amendment: Developer may close on more than two acres at any closing with any excess land area acquired being credited against the aggregated land area requirement.
- Transaction schedule:
§ Current: Developer must acquire all of the Private Development Parcels no later than 60 months after the Initial Acquisition (December 20, 2023).
§ Amendment: Developer must acquire all of the Private Development Parcels no later than 84 months after the Initial Acquisition (December 20, 2023).
Attachments
Attachment(s)
Resolution