Item A: Beam Development Purchase and Sale Agreement Terms

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EURA UGENE RBAN ENEWAL GENCY AIS GENDA TEM UMMARY Work Session: Beam Development Purchase and Sale Agreement Terms Meeting Date: May 21, 2008 Agenda Item Number: A Department: Planning and Development Staff Contact: Mike Sullivan www.eugene-or.gov Contact Telephone Number: 682-5448 ISSUE STATEMENT The Urban Renewal Agency Board (URA) provided direction to pursue a development agreement for the downtown Beam Development project. The URA is being asked to review and act on terms to be included in a purchase and sale agreement between the URA and Beam Development. BACKGROUND On December 10, 2007, the URA provided direction to pursue a development agreement for the Beam Development project and to proceed with acquisition or assignment of the purchase options on the Washburne Building, Centre Court building and adjacent lot, within the financial constraints of the current $33 million urban renewal district spending limit. On March 10, 2008, the council approved the supplemental budget action necessary to move forward with the purchase of the Centre Court building and adjacent lot and the Washburne Building. On March 24, 2008 (the purchase option expiration date), the Agency provided exercise notice of intent to purchase the Centre Court and Washburne Building properties. Consistent with the terms of the purchase option agreements, the URA paid a deposit equal to 10% of the purchase prices ($470,000). On April 16, 2008, the URA considered next steps related to the scheduled end to the due diligence period (May 8). The URA provided direction to “1) work with Beam and the property owner to extend the timeline for the purchase option agreements on the Centre Court building and adjacent lot, and the Washburne Building, 2) work towards an assignment of the purchase options to Beam, and 3) continue to work with Beam on elements of acquisition and redevelopment financing consistent with the amounts and terms outlined in this agenda item. If an extension of the option agreement timeline is not approved prior to May 7, then the Agency Director shall inform the property owners and the escrow agent that the URA will not be acquiring the property and the deposit should be returned. If a satisfactory extension is approved, the Agency Director shall bring back terms to be included in the assignment of the purchase options to Beam as soon as practicable.” In the discussion, the URA clarified that Beam would be responsible for providing any needed extension money payments. On May 7, 2008, the Agency and the property owner signed an amended purchase option agreement which provided for the extension of the due diligence period to May 23, 2008 and a reduction of the combined purchase prices from $4.7 million to $3.6 million. In consideration for these considerations, Beam is set to provide $50,000 in additional deposit money no later than May 23. The required 10% Y:\CMO\2008 Council Agendas\M080521\S080521A.doc