Consider Fifth Amendment to Purchase Agreement - Suite Living

On November 22nd, 2011 the HRA executed the Fourth Amendment to the Purchase agreement between TOTI Holdings, LLC (Suite Living) and the HRA for the purchase of land described as Lot 4, Block 1, COR ONE. This amendment contained additional consideration for an extension of the proposed closing date to 2/15/12.  While this agreement has not expired, the proposed closing date has passed, requiring the HRA to either consider an amendment to the agreement, or termination.

To date, TOTI has paid over $110,000 including $50,000 in hard (non-refundable) earnest monies and over $60,000 in extension fees to carry this property. TOTI has been open about their challenges in completing both the plans and the financing terms on the proposed three story project.  This building is a first for them and they have considered both stick-built and modular options for the construction. They have presented updated  financing commitments on several occasions, and also had their finance partners available at HRA meetings to answer a number of questions.

The proposed fourth amendment contemplates two concepts.  TOTI has proposed a scenario where they close on the property in March with one-half of the purchase price due at closing, and the remainder on a six month note payable to the HRA before construction can commence.  This would allow them to utilize all the existing due diligence studies (soils, environmental, ALTA, title work, etc) before they expire, and would let them focus on the permanent financing and construction.

This extension would carry a fee (not applicable to closing) of $20,000.

If they are able to close by March 15th as outlined above they would have 6 months in which to pay the remaining note balance to begin construction.

If they were not able to close by March 15th, an additional $100,000 non-refundable earnest money would be due, and they would have until June 1, 2012 to close on the entire balance.

The development team recognizes that considerable effort as well as expense has been incurred by this buyer. The product Toti proposes is consistent and supportive of the design of The COR, and there is no immediate urgency in the disposition of this parcel because there are numerous parcels adjacent to and in the area of the subject site for other users.  The development team therefore recommends the HRA approve the proposed amendment to the purchase agreement and direct the Executive Director to execute the document upon receipt of the extension fee.

N/A

Approve the proposed amendment to the purchase agreement and direct the Executive Director to execute the document upon receipt of the extension fee.