PRESENTER: Presenter
Robert Camareno, City Manager
Jonathan Packer, President Chamber of Commerce
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SUBJECT: Title
Public hearing, discussion, and possible action approving a project expenditure of up to $2,000,000 for additional due diligence costs and financing interest related to the previously approved project for the purchase up to 100 acres out of the AM Esnaurizar Survey No. 1, Abstract 1, Comal County, Texas, pursuant to section 501.101 of the Texas Local Government Code.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: 4
BACKGROUND INFORMATION:
The New Braunfels Economic Development Corporation (NBEDC) voted unanimously at its meeting on June 20, 2024, to approve the purchase up to 100 acres out of a 240-acre tract at the corner of Kohlenberg and FM 1101 for a purchase price of up to $20,000,000, as depicted on Exhibit A. The expenditure authorized the NBEDC to enter two separate rights of first refusal agreements for the remainder of the 240-acre tract referenced on the attached Exhibits. As part of the agreement to purchase, the seller will dedicate at no cost to the City of New Braunfels, the right of way necessary for the construction of the Kohlenberg Rd. improvements project.
Purchase terms included up to $12,000,000 to be provided in cash at closing with $1,000,000 paid annually for eight (8) years beginning on October 1 of the year following closing. The proposed purchase agreement provides for any interest to be paid, shall be a rate of four (4%) percent annually which is a one percent increase from the initial negotiation. The additional supplemental funding would cover the projected interest cost of paying the $8,000,000 note and the projected due diligence costs for inspecting, appraising, and other related costs with the closing of the purchase of the property.
ISSUE:
The expenses related to the purchase of up to 100 acres.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
Up to $12,000,000 will be provided in cash at closing with $1,000,000 paid annually for eight (8) years beginning on October 1st of the year following closing until paid in full. Seller agrees that any interest which shall accrue or be paid, with respect to any portion of the payments outlined above, shall be at a rate of four percent (4%) annually. The additional due diligence costs and financing interest fees are calculated at up to $2,000,000.
Recommendation
RECOMMENDATION:
The NBEDC consider action approving the additional due diligence costs and financing interest related to the purchase of the property for future use as an industrial, commercial, or institutional site at a future date.