Recommend approval to authorize the City Manager to execute a purchase and sale agreement, sign the deed, and associated closing documents with Gamble Partners, LLC for the sale of surplus property located at 2-10 East Bay Street in the amount of $7,050,000. In August of 2017, Council chooses to surplus this property, because the renovation costs to modernize the office space were estimated to cost the taxpayers an additional $7 to $9 Million ($150 to $200 per square foot). This action would finalize the transaction previously authorized by Council.

A previous request for bids/proposals (Event # 5981) was issued on March 20, 2018 and closed on June 19, 2018. The sale was awarded to a developer who proposed a condominium project. During due diligence, the former purchaser withdrew from the transaction. Therefore, the property was put back on the market for sale. A new Request for Proposals was issued (Event #7237) on June 25, 2019 and closed on September 24, 2019 soliciting bids and proposals for acquisition of the property. The City’s contracted real estate broker (Colliers International) marketed the property.

Three qualified proposals were received and evaluated by an interdisciplinary committee. Gamble Partners, LLC, a well-qualified and experienced real estate development company based in Houston, Texas and New Orleans, Louisiana, was the highest rated proposer. The highest rated proposal includes a plan to redevelop the property as a multi-story guesthouse complex, with shared office space, and other amenities. The proposer has agreed to pay a price of $7,050,000 to acquire the property; equating to +/- $160/square foot of building area. The proposer plans to invest a total of +/- $22 Million in the property; including the purchase price. Property taxes, hotel/motel taxes, sales tax, and other revenues would be generated from hotel guests.

In addition, Gamble Partners, LLC, agrees to a two-stage due diligence period. Stage 1 would cover all entitlement issues associated with the proposal (i.e. exterior alterations, height, zoning, etc.). This stage would expire on December 31, 2019 at 5:00 pm EST. In the event the buyer chooses to move to Stage 2 of the due diligence period, buyer agrees that $50,000 of the earnest money deposit would become non-refundable. Stage 2 would cover all other due diligence issues associated with the project (i.e. title, environmental, structural, etc.). This stage would exclude all entitlement issues, and expire 75 days from the effective date of the contract.

Request acceptance of the proposal; award of the sale to Gamble Partners, LLC; and authorization for the City Manager to execute the purchase and sale agreement, deed, and associated closing documents once finalized. In the event Gamble Partners, LLC terminates the contract during either stage of the due diligence period, or fails to close, Council authorizes the City Manager to negotiate, and enter into a purchase and sale agreement, sign the deed, and associated closing documents with the second highest rated proposer.

The method used for this procurement was the request for proposals (RFP) which evaluates criteria in addition to cost. The criteria used for this RFP were qualifications of development team, quality of design proposal, and schedule of performance, local vendor participation, and fees.

Approval