INDIANTOWN – The members of the Village Council here gave their verbal consensus Nov. 20 to renegotiate a $3 million purchase and sale contract for the 5.1-acre property at 15225 S.W. Warfield Blvd. that a previous Council in 2022 had slated for a new Village Hall until voters that August replaced two of its members who’d supported that idea.
Village Manager Taryn Kryzda briefly introduced the item that evening before handing it off to Village Attorney Wade Vose.
“On Tuesday, I received an envelope that had been dropped off, and inside that was the contract that is attached to this agenda item,” she said. “Essentially, they’re offering to purchase our five-acre piece and it has some options in there as well. The reason I put it on the agenda is because it says this transaction would be completed by Dec. 12 or not be valid, and your next meeting is Dec. 11. I’m not expecting you to take specific action other than providing Mr. Vose with some direction.”
Vose then explained the need for staff to rewrite the contract on a different form because options had been added to the $3 million land-purchase agreement on an improper form for doing so.
“One of the most important pieces for understanding this whole thing is the buyer agrees to replace this initial standard-form contract with a more formal contract within seven days of formal acceptance,” he said. “I think the appropriate way to move forward with regard to this would be for myself and your broker Kevin Powers as well to work with the prospective buyer. In addition, they are looking to procure a one-year option for $75,000, [which] means they want to effectively lock up this property for a whole year while they engage in their evaluations. Built in this contract is a 90-day due diligence period.”
Vose proceeded to describe the contract request for an additional one-year $75,000 option, which he characterized as a “broader second-phase due-diligence that they’re willing to pay for.”
“The prospective buyer intends to build a healthcare campus [and] provide a conceptual site plan by Dec. 5,” he continued. “Our suggestion about getting a more formal contract together would be to ask them to stick with that timeline on Dec. 5 because I think that would be helpful for you all if they’d already committed to putting together a conceptual site plan. In the opportunity I’ve had to look at the principals behind this entity, my initial read is that these folks are real, to put it in the vernacular.”
Councilwoman Karen Onsager – who’s also a real estate broker – was the first to provide comments.
“I read over this contract, and just like you said, it needs to be put on the proper form,” she said. “They’re paying for the option, but I think holding it another year out, we should consider some kick-out clause. I like the idea of selling it, but I’m a little apprehensive about holding it for $150,000 for two years. That would be my only concern. It would be a discussion item, not a deal-killer.”
Vose immediately asked Onsager to clarify the terminology for her colleagues who wouldn’t necessarily understand the real-estate jargon.
“In an option contract, they’re buying the time,” the latter said. “It’s not typical to see the 90-day due diligence: It’s typical that they hold due-diligence for the entire year. I understand what they’re doing – they don’t want to commit until they know the property’s going to work for them. I don’t really have a big hold-up on that. The closing date would need to be corrected if they’re asking for the second option.”
Board Member Onsager then addressed the aforementioned kick-out clause.
“That gives them an X amount of time if someone else comes forward and says I will put a contract on it,” she explained. “Then that kick-out clause says you’ve got 90 days to make up your mind whether you want to actually purchase it, or we’re going to sell it to the other person. I feel like they need to come up with a little bit more option money if they hold it up for that second year. I’ve written a lot of option contracts, and this is something typically we see.”
Board Member Phyllis Waters-Brown subsequently lobbed several questions at the Village Attorney.
“So they give $75,000, they do the 90-day due diligence and they decide at that point they wish not to continue,” she said. “Where does that leave us?”
“During the first 90-day period, the $75,000 would be like a refundable deposit,” Vose replied. “That, by the way, is very typical in a commercial real estate purchase contract.”
“And after the 90 days, they say yes, I want to continue – what happens then?” Councilwoman Waters-Brown prodded.
“That $75,000 would become the Village’s at that point,” Vose answered. “We get to put it to use, and it remains under the option for the rest of the year.”
When the councilwoman subsequently mentioned the fact there were no water and sewer services on the parcel, Kryzda chimed back in, emphasizing that the property might not even get those services until a new water plant goes online in a couple more years.
“We’re having some conversations about doing some things differently with our existing wells,” she said. “Until we get the site plan and know what they’re planning in there, it’s hard to say if it would have it or not.”
After concerns expressed by Board Member Waters Brown over the Village permanently losing property taxes on the land due to the developer’s requested non-profit status, Vose provided clarification.
“Non-profits that do stuff like that don’t pay taxes because they’re doing other community benefits,” he said. “That’s the rationale behind the tax policy there. The one thing I would offer to you there is, regardless of the tax consequences, in the end it’s just one parcel.”
After Councilwoman Onsager reiterated her desire for the kick-out clause, Mayor Carmine Dipaolo went to bat for the development group’s option requests due to the current lack of utilities.
“What we’re dealing with is the reality that whoever purchases it is going to have to wait up to two years to utilize that property,” he said. “I don’t know too many people that are going to spend that kind of money and just let it sit there. You’re talking $75,000 and $75,000 if you go for a second year. There’s $150,000 plus the $3 million, so that’s $3.15 and a deal I would take. We’re not voting on anything here; we’re just giving direction to Powers [and[the client to hack out a contract. These guys are real: I don’t think they’d be here just to play a game.”
The Board ultimately gave its verbal consensus to Vose to proceed. The only member of the public to speak, Community activist Linda Nycum, reiterated the concerns expressed by Onsager and Waters Brown as well as emphasizing the newness of the limited liability corporation formed for the purchase.
“The buyer building tomorrow’s infrastructure was formed on Nov. 13, according to their articles of incorporation,” she said. “That’s not a lot of time to establish any history of good business practices, let alone financial stability. I expect our elected officials to do more due-diligence before committing to this. It’s time to do a lot of homework on this before putting our name to the bottom line.”
The Village Council will conduct a formal hearing on the contract Dec. 11.