Agenda 03/10/2009 Item #10B
Agenda Item No. 10B
March 10, 2009
Page 1 of 5
EXECUTIVE SUMMARY
Recommendation to approve the financing and expenditure for the purchase and
renovation of the Naples Lodge 2010 Benevolent and Protective Order of the Elk's
ofthe USA, Inc., at a cost not to exceed $4,618,891.
OBJECTIVE: To obtain approval from the Board of County Commissioners for the financing
and expenditure of funds for the purchase and renovation of the Naples Lodge 2010 Benevolent
and Protective Order of the Elk's of the USA, Inc. (Elk's Lodge).
CONSIDERATION: During recent meetings of the Board of County Commissioners, the County
Manager discussed his intentions to research the current real estate market for any
opportunities for the County to purchase property in order to reduce the number of County
leases that are currently in effect.
The County is forced to reduce spending and Is required to cut its budget due to the State's
reduction in funds to counties throughout the State. At the Board of County Commission
meeting of February 24, 2009, the County Manager advised the Board that he would like to
terminate the existing lease for the Property Appraiser's building, which has become very
expensive, and relocate that office to a County-owned property. However, there is no facility
available in the County's inventory of buildings that can accommodate that office.
Staff was asked to research the market and found a number of properties, including the Elk's
Lodge, located on Radio Road, to be available for sale and suitable for County use. The Elk's
Lodge is approximately 27,474 square feet of interior space with abundant parking surrounding
the building.
On February 23, 2009, the County provided the Elk's Lodge with a Letter of Intent for the
purchase of the property. The Letter of Intent, which is attached, included a purchase price of
$3,500,000, without any stipulation for the Seller to prOVide financing. The negotiations included
a provision for $250,000 to be held in escrow to correct any structural issues that the County
would be made aware of during the inspection period. Closing shall take place on or before
June 26, 2009.
The estimated costs for the purchase of the property are as follows:
Purchase price:
Closing and associated costs:
Renovations and associated costs.:
Total:
$3,500,000
$49,000
$1,069,891
$4,618,891
(*The building would be converted from banquet and kitchen space to office space.)
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Agenda Item No. 10B
March 10, 2009
Page 2 of 5
Elk's Lodge
Page Two
The County anticipates the main tenant for the building to be the Property Appraiser's Office,
with a portion that may be used by the Supervisor of Elections for records storage. The Property
Appraiser is currently leasing space across from the Government Center at the corner of
Tamami Trail East and Airport-Pulling Road. The annual rent for that building is $549,365.25
and the common area maintenance charges (CAM) are $83,694.75 annually, for a total annual
cost of $633,060. The rent is increased by 5% annually throughout the life of the lease and the
CAM is increased to reflect the landlord's actual operating expenses. In theory, the County
could service the mortgage for the Elk's Lodge in approximately eight (8) years in lieu of making
rent and CAM payments at the current leased space, and in turn, the major benefit would be
final ownership of the property.
If the Board is agreeable to purchase the Elk's Lodge, staff will be submitting an Agreement for
Sale and Purchase for Board approval at the April 28, 2009, meeting.
FISCAL IMPACT: The Solid Waste Department has set aside money for landfill closure costs in
Fund (471). A portion of the fund's cash balance will be bOlTOwed and repaid within eight (8)
years and the repayment will include interest set at the missed opportunity cost (blended
interest lost on fund investments). The interest rate will be adjusted annually on January 1.
Budget amendments are needed to transfer the money from Solid Waste Fund (471) to General
Governmental Facilities Impact Fee Fund (390). The property purchase and related renovations
are allowable expenditures out of the Impact Fee Fund. Loan repayment will be out of the
General Governmental Facilities Impact Fee Fund if cash is available or the General Fund
(001). The estimated annual loan payment is $630,000 per year.
GROWTH MANAGEMENT: There is no Growth Management impact associated with this
Executive Summary.
LEGAL CONSIDERATIONS: This item is not quasi-judicial, and as such ex parte disclosure is
not required. This item requires majority vote only. - JBW
RECOMMENDATION: That the Board of County Commissioners approves the financing and
expenditure for the purchase and renovation of the Elk's Lodge and approves all related Budget
Amendments.
PREPARED BY: Michael Dowling, Senior Property Management Specialist, Real Property
Management I Department of Facilities Management
Page ] of 1
Agenda Item No. 10B
March 10, 2009
Page 3 of 5
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
Item Summary:
10B
Meeting Date:
Recommendation to approve the financing and expenditure for the purchase and renovation
of the Naples Lodge 2010 Benevolent and Protective Order of the Elks of the USA, Inc. at a
cost not to exceed $4.618.891 (Jim Mudd, County Manager and Skip Camp, Facilities
Management Director)
3/10/200990000 AM
Approved By
Michael H. Dowling
Property Management Specialist
Date
Administrative Services
Facilities Management
3/2f2009 2:27 PM
Approved By
Toni A. Mott
Real Property Supervisor
Date
Administrative Services
Facilities Management
3/2/2009 2:28 PM
Approved By
Scott R. Teach
Assistant County Attorney
Date
County Attorney
County Attorney Office
3/2f2009 3:52 PM
Appro\'ed B:r
Skip Camp, C.F.M.
Facilities Management Director
Date
Administrative Services
Facilities Management
312/20093:57 PM
Approved By
Len Golden Price
Administrative Services Administrator
Date
Administrative Services
Administrative Services Admin.
3/2/2009 4:37 PM
Approved By
Daniel R. Rodriguez
Solid Waste Director
Date
Public Utilities
Solid Waste
3/3/20098:08 AM
Approved By
Thomas Wides
Operations Director
Date
Public Utilities
Public Utilities Operations
3/3/2009 9:50 AM
Approved By
James W. Delany
Public Utilities Administrator
Date
Public Utilities
Public Utilities Administration
3f3f2009 12:59 PM
Approved By
Susan Usher
Senior ManagementfBudget Analyst
Date
County Manager's Office
Office of Management & Budget
3/3/20093:47 PM
Approved By
James V. Mudd
County Manager
Date
Board of County
Commissioners
County Manager's Office
3/3/20093:55 PM
file:! /C:\AgendaT est\Export\ 125-March%20 1 0, %202009\ 10. %20COUNTY%20MANAG ER... 3/4/2009
Agenda Item NO.1 OB
March 10, 2009
Page 4 of
COLLIER COUNTY
OFFICE OF TIlE COUNTY MANAGER
3301 East ramiami rT1lil . Naples. Florida 34112 'i239} 252-8383' fAX: (239) 252.4010
Letter of Intent
Elk's Lodge
3950 Radio Road, Naples, Florida
Wben executed by both the undersigned, Collier County, as Buyer, and the Naples Lodge 2010
Benevolent and Protective Order of the Elks of the USA, Inc., as Seller, this document will
constitute a Letter ofJntent relative to the acquisition of the Property by the unden;igned Buyer.
The pUlJlOSe of this Letter of Tntent is to (i) indicate certain terms upon which the Buyer is
prepared to purchase the Property from the Seller and the Seller is prepared to sell the Property
to the Buyer and (il) spell out certain rights and obligations of the Buyer and Seller pending the
execution of an Agreement for Sale and Purchase between the parties.
By acceptance of this Letter of Intent, the Seller gives the Buyer the exclusive right to purchase
the Property for the period begirm.ing from the dale hereof through and including said closing
date ofJune 26, 2009.
The Contrnct shall contain, among other things, the following terms and conditions:
I. The total purchase price for the Property shall be $3,500,000.00, without any financing
contingency. This will be a cash purchase.
2. The sum of $250,000.00 shall be held in escrow to correct any structural deficiencies
which may be determined during the inspection period.
3. The Buyer shall bave a period of sixty (60) days from the effective date of the Agreement
for Sale and Purchase to conduct its due diligence ("Inspection Period").
4. Seller's obligation shall be contingent on its execution of the Agreement for Sale and
Purchase, to be prepared by Buyer, from the Board of Trustees of the Naples Lodge 2010
Benevolent and Protective Order of the Elk. of the USA, Inc. and the Elks Grand Lodge
on or before MlUt:h 30, 2009.
5. Buyer's obligation shall be contingent on its obtaining approval of the purchase from the
Collier County Board of CoWlty Commissioners on or before April 28, 2009.
6, Tbe closing shall oc:eor on or before June 26, 2009.
Agenda Item NO.1 OB
March 10, 2009
Page 5 of 5
The Buyer and SeUer agree that should the Buyer decide to go forward with the purchase.
negotiations on the Agreement for Sale and Purchase shall begin immediately to ensure that the
c1()Sing shall take place on or before June 26. 2009.
Datw: /-~ /t;?
Agreed and accepted:
On behalf of Collier County:
,~~ -y~ ~
James V, Mudd
Dated: ,.:.-/)'1/01
On bchalfoffue Naptb Lodge 2010 Benevolent
IIJld Pro:~pte Order of the Elks of the USA, Inc.
I~ ~~ j--" ~~7/
Ro1:fert Smith, Cbainnan of the Bow ofTrostees