MEMORANDUM OF UNDERSTANDING FORMER DELAND JAIL SITE REDEVELOPMENT / GLASSHOUSE SQUARE

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1 MEMORANDUM OF UNDERSTANDING FORMER DELAND JAIL SITE REDEVELOPMENT / GLASSHOUSE SQUARE This Memorandum of Understanding (this Memorandum ) is entered into by and between GlassHouse Square, LLC, ( GlassHouse ) and the City of DeLand (the City ) for the purpose of identifying and memorializing the mutual understanding of Glasshouse and the City relating to the terms that are proposed to be included in a binding contract between them for the redevelopment of the former Volusia County Jail property (the Project ). WHEREAS, the City exchanged the former City Hall Annex building located on West Rich Avenue, for the rental of which the City was receiving approximately $50, annually, for the former Volusia County Jail site and adjacent Volusia County employee parking lot, together with a lot located adjacent to the City s sewer plant; and WHEREAS, the City committed to Volusia County, as part of the exchange, that the former Volusia County Jail site would be redeveloped and not be used for a parking lot, but rather would be redeveloped into a productive, tax producing property; and WHEREAS, the former Volusia County Jail site bears a tax parcel identification number of and a street address of 130 West New York Avenue, is approximately 0.87 acres+ in size and includes the former/vacant Volusia County Jail (the Jail Parcel ). The Jail Parcel has a future land use designation of Downtown Commercial and is zoned C-2A with a historic overlay; and WHEREAS, the former Volusia County Jail located on the Jail Parcel contains asbestos which must be removed before the Jail Parcel can be used for any purpose whatsoever; and WHEREAS, the Jail Parcel is located between New York Avenue (State Road 44) to the north and Georgia Avenue to the south; and WHEREAS, the Georgia Avenue area has, primarily through private investment, been redeveloped over the past several years and has turned into a vibrant entertainment, dining and shopping area within the City s downtown; and WHEREAS, the Downtown DeLand Community Redevelopment Agency has recently completed a streetscape project which complements the architecture of the buildings along Georgia Avenue, many of which are constructed of brick; and WHEREAS, the City intends for any redevelopment of the Jail Parcel to be completed in an architectural style that is complementary to the brick architecture which is prevalent along Georgia Avenue; and 1

2 WHEREAS, the City provides the majority of the vehicular parking in the downtown DeLand area, without which the majority of the businesses in the downtown area could not successfully operate; and WHEREAS, it has been and remains a priority of the City to provide public parking for the businesses in the downtown area, as the success of those businesses, and the economic vitality of the area, are partially dependent upon the availability of parking; and WHEREAS, a Request for Proposals ( RFP ) was issued by the City seeking proposals from the private sector for the redevelopment of the Jail Site and the parking lot to the south; and WHEREAS, GlassHouse was selected through the RFP process as the entity to redevelop the Jail Site; and WHEREAS, GlassHouse proposes to redevelop the Jail Site by constructing GlassHouse Square, a mixed-use, infill project anchored by the Deltran Operations USA, Inc. World Headquarters; and WHEREAS, in order to commence the redevelopment of the Jail Site, GlassHouse will be required to enter into a comprehensive contract with the City, which will be legally binding on both parties, in order to clearly and comprehensively address the rights and obligations of each party; and WHEREAS, GlassHouse will need to expend a significant sum of money (beyond that which it already has) on preliminary design work and on the preparation of legal documents in order to present the City with a comprehensive contract for review and consideration, and the City staff will need to spend significant time reviewing and revising such contract so that it can ultimately be presented to the City Commission for consideration; and WHEREAS, it is typical in the private sector, when two parties conceptually agree to the major points related to a proposed transaction, that they enter into a non-binding letter of intent so that each party can be sure that it has the same vision for the transaction as the other party, and so that they do not expend a significant amount of time and money if they do not have the same vision for the transaction. In the public sector, the letter of intent is oftentimes achieved through the execution of a non-binding memorandum of understanding; and WHEREAS, GlassHouse and the City desire to enter into this Memorandum for the purpose of setting forth their understanding of the major points of the proposed transaction related to the Project; and WHEREAS, this Memorandum is not intended in any way to constitute a binding contract between the City and Glasshouse, but only as a memorialization of the good faith intent of the parties as they work toward a formalized and legally binding contract. Now, Therefore, the City and Glasshouse set forth their intentions as follows: 2

3 Purpose The purpose of this Memorandum is to provide the framework for a future contract regarding the Project, such proposed contract to be hereinafter referred to as a Project Agreement. This Memorandum is not intended to be a binding contract, nor shall any provision hereof be deemed in any way to bind either party nor to bind the legislative authority of the City. Building Program The proposed building program is as follows: BUILDING STORIES (NOT TO USE(S) EXCEED) ,000 GSF Retail/Commercial 10,000 GSF The Innovation Center 10,000 GSF Deltran Headquarters 10,000 GSF Rooftop Event Space 2 3 Ground floor 2,800 GSF Retail/Commercial Second floor 3,800 GSF / 5 Artist s Lofts Third floor 1,500 GSF Gallery Rooftop Entertainment / Event Space N/A N/A Green square / water feature area N/A N/A GlassHouse Alley N/A N/A Private parking lot location to be determined in Project Agreement Required Project Approvals Following execution of this Memorandum, the Project Agreement will be drafted and presented to the City Commission for review and approval. Following approval by both parties of a Project Agreement, the required government approvals, and the order in which they would generally be obtained, are as follows: Glasshouse will submit an application for rezoning of the Jail Site to a planned development zoning. The planned development will address, along with all other elements customarily addressed in a planned development, parking, site layout and architecture. Glasshouse will submit a Class IV site plan for the entire Jail Site (reviewed by both the Planning Board and City Commission per the City s Land Development Regulations). 3

4 Glasshouse will submit applications for a certificate of appropriateness from the City s Historic Preservation Board (this can be done prior to, contemporaneously with, or following site plan approval). Glasshouse will submit applications for permits from the St. Johns River Water Management District, Florida Department of Environmental Protection, Florida Department of Transportation, and any other governmental entity from which a permit is legally required. Glasshouse will submit an application to the City for construction permits, right-of-way permits, and any other permits required under the City s Land Development Regulations. All of the foregoing permits and government approvals are referred to herein as the Final Project Permits. Glasshouse acknowledges that the City does not, and as a matter of law can not, agree by way of a Project Agreement or any other contract to pre-approve the foregoing applications. This is because the law forbids the government from contracting away its legislative authority in the land development approval process. The Project Agreement will specifically recognize this fact and provide that Glasshouse has no claim or cause of action against the City in the event that the Project, and all elements thereof, are not approved by the City through the development approval process described above. Anticipated Contractual Commitments The following elements are contemplated as being the basis of a binding contract (Project Agreement) for the development of the Project: A. City obligations: 1. Upon Glasshouse obtaining Final Project Approvals, Glasshouse will provide to the City a performance bond or other acceptable security guaranteeing completion of the Project. Thereafter, the City will demolish the former Volusia County Jail building and remove all asbestos. However, if the cost to demolish the building and remove the asbestos exceeds the sum of $300,000.00, Glasshouse will have the option of paying the excess amount or cancelling the Project Agreement. 2. Following demolition and removal of asbestos, the City will convey fee simple ownership of the Jail Site to Glasshouse. The City will retain an easement over the Glasshouse Alley, running along the eastern edge of the Jail Site from Georgia Avenue to New York Avenue, and which will be more specifically described in the Project Agreement. The easement will allow the City access to the alley for maintenance; allow the City to install underground utilities and to allow other utility companies to do the same; allow the City to grant temporary access to adjoining 4

5 property owners with zero lot line buildings for periodic maintenance of the buildings; and provide that the alley will generally remain open to access by members of the public as invitees. 3. Provide a payment one time each year for a period of ten years equal to the total ad valorem tax collections for Volusia County and the City of DeLand millage paid into the Downtown DeLand Community Redevelopment Trust Fund for the 10,000 GSF Deltran Headquarters. The payment will be made only after the ad valorem taxes for the entire Jail Site have been paid for that year. As a condition of this payment, Deltran must maintain its headquarters on the Jail Site. The Project Agreement will set forth a minimum number of employees and minimum pay rate each year in order to continue receiving the incentive payment set forth herein. 4. Grant to Glasshouse a five-year option on the former Volusia County employee parking lot south of Georgia Avenue (the Parking Lot Parcel ). Although the option will be recordable at the time of title transfer of the Jail Site, the option period would commence five years following the issuance of the first certificate of occupancy for the Project and terminate five years thereafter. The option would provide that Glasshouse would be entitled to buy the Parking Lot Parcel for the fair market value (based upon an MAI appraisal paid for by Glasshouse but obtained by the City) of the Parking Lot Parcel as of the date of transfer of title to the Jail Site, with an adjustment for the change in the Consumer Price Index from the date of the appraised value to the date the option is exercised. The option would be subject to the following conditions: i. GlassHouse would be required to replace the existing parking spaces in the Parking Lot Parcel with an equal number of parking spaces, at its sole cost and expense, within 250 feet of the Parking Lot Parcel, as well as provide all parking required for the development of the Parking Lot Parcel. ii. The building would be limited to three stories in height. iii. Any residential units would be constructed to provide exterior sound attenuation, to an identifiable standard to be set forth in the Project Agreement. 5. Allow Glasshouse to use the City owned vacant lot located at 224 South Florida Avenue for construction staging and construction worker parking (subject to Glasshouse providing liability insurance for same). B. GlassHouse obligations: 1. Provide payment of the following: 5

6 i. Closing costs associated with conveyance of the Jail Site. ii. City application fees associated with the entitlement process. iii. City & County impact fees, subject to any applicable credits. iv. City permit fees. v. All other typical development fees related to development of the Project. 2. Provide design, engineering, permitting and installation/construction of the Project with all of the elements set forth in the Building Program Section above. The design of the buildings and other features will be consistent with the representations made during the RFP process related to the Jail Site. The Project Agreement will incorporate these representations by including renderings showing the style and scale of the architecture. Final approval will be subject to the typical development review process pursuant to the City s Land Development Regulations. 3. Provide, on private property, ALL of the parking spaces required for the Project as determined through the development review process in accordance with the City s Land Development Regulations. 4. During construction, Glasshouse will maintain its laydown area and all construction staging operations on the Jail Site or the City s lot located at 224 South Florida Avenue and otherwise avoid impacts to Georgia Avenue. Glasshouse will ensure that its construction force does not park in the Parking Lot Parcel. 5. Provide a security instrument, as mentioned in Section A.1. above, ensuring completion of the Project prior to or contemporaneously with the transfer of title of the Jail Site by the City. The Parties support the goals and objectives of this Memorandum and agree to work together toward execution of a binding agreement for the approval and development of the Project: Glasshouse Square, LLC City of DeLand By: Date By: Robert F. Apgar, Mayor Date 6