(1) Valterra (Capital Senior Housing) will now assume responsibility for the environmental remediation of the property but will do so at the Town’s expense;
(2) upon execution of the contract, Valterra (Capital Senior Housing) will deposit $100,000 in escrow and then assist the Town in working with the DEC during the (90) day feasibility period to quantify the cost of remediation and determine necessary remediation measures;
(3) once the cost of remediation is quantified, both parties will agree upon an amount of money to be placed in escrow that Valterra can draw down from to complete remediation;
(4) remediation will take place after closing and money placed in escrow for remediation will be deducted from the Town’s $3.5 purchase price;
(5) closing will occur upon Valterra receiving all necessary approvals to construct and operate “an assisted living residence” that complies with 285-10 A(4)(f) of the Town Code;
(6) closing will not occur until Valterra receives Town approvals and NYS Phase I Department of Health approval for an Assisted Living Residence (estimated at 12 to 18 months);
(6) Valterra will accept a quitclaim deed from the Town in lieu of a Bargain and Sale deed;
(7) closing is no longer contingent upon Town completion of environmental remediation; and
(8) Construction and remediation will occur concurrently.
Other assisted living facilities generate about $500,000 a year in combined taxes to the county, town, fire and school districts – with the majority of the taxes going to the school district. In addition to the above the town will receive significant building permit fees based on the value of the construction.
I’m writing to you and the Board in connection with the anticipated forthcoming resolution to authorize the Town to enter into a purchase and sale agreement with Capital Senior Housing, LLC (or its affiliate) (“CSH”) for the sale of the former Frank’s Nursery & Crafts property located at 715 Dobbs Ferry Road, Greenburgh, NY. I am pleased to say that after approximately 1.5 years of marketing, I am convinced that in light of the property’s environmental conditions and restrictive zoning, among other things, and based upon the feedback from prospects and competing offers, CSH’s $3,525,000 offer is the highest and best in the marketplace. I strongly recommend that the Board adopt a resolution authorizing you to enter into the contract with CSH.
My recommendation is based on my experience with this property and feedback that my team and I have gotten from the marketplace. The remainder of this letter summarizes our involvement and the progression of the sale process.
I. KEEN’S RETENTION--MEMO FROM HAROLD BORDWIN, BROKER
The Town retained my firm (“Keen”), on June 17, 2014, as the Town’s broker.
II. KEEN’S EFFORTS AND RESULTS
- Organized due diligence materials subject to the execution of a non-disclosure agreement (“NDA”).
- Managed the dissemination, negotiation and execution of NDAs.
- Attending and marketing the property at the July 2, 2014 meeting in Rye of The New York State Health Facilities Association/New York State Center for Assisted Living conference.
- Placing advertisements in the New York Real Estate Journal, The Journal News, The New York Times, Westchester County Business Journal, Senior Living Executive Magazine, The Journal News RE Review, Seniors Housing Business, and Northeast Real Estate Business E-Newsletter.
- Listing the property on our web site, on www.loopnet.com and on www.costar.com.
- Disseminating multiple email blasts to subscribers of Dealmaker’s Real Estate and Real Estate Brokers forums, bigboysblast.com, propertysend.com, and propertyblast.com as well as to a targeted list of users, real estate investors, brokers, and professionals from Keen’s database.
- Mailing over 800 teasers to individuals in the assisted living, healthcare and nursing home industries based upon lists culled from the Westchester Business Journal, Hoovers, and the CapIQ databases.
- Placing a for-sale sign was installed at the property.
Keen continued to market the property, respond to questions, and solicit offers.
G. Pursuant to the terms of the NDA executed by prospects and by the Town, the Town is not at liberty to disclose the identity of prospects.
H. On April 16, 2015, the Town received a $2.7 million offer from a prospect that I’ll refer to as “Prospect A”. That offer was for a senior independent living facility (a non-conforming use), was subject to a zoning contingency, and obligated the Town to deliver water and gas to the property, among other things.
I. After receiving the offer and conferring with the Town, Keen reconnected with all prospects by:
1. Emailing an update to all prospects, soliciting offers for receipt by May 8th
, 2015, and
2. Directly calling all prospects.
J. As a result of these efforts, 5 prospects showed a renewed interest in the property. Several of those prospects indicated that they would only be interested in the property if their offer could be subject to a zoning change. The Board, with me and with community members, engaged in extensive discussions about whether to be open to changing the property’s zoning. The community feedback overwhelming supported leaving the zoning as-is.
K. Following this outreach, the Board decided to limit consideration of offers to those that conformed to the current zoning.
L. Two conforming offers were received to develop assisted living facilities. “Prospect B” offered $2,750,000, and Capital Senior Housing, LLC offered $2,500,000. Both offers were condition upon, among other things, the Town completing the environmental remediation of the property.
M. After consultation with the Town, we sent all offerors a $3,250,000 counter offer, seeking a response by June 26, 2015.
N. On June 25th
, 2015, Keen received an inquiry from Prospect C. After signing the NDA, Prospect C also received our counter-offer.
O. On July 21, 2015, the Town Board met with Prospect B and with Capital Senior Housing. Both groups delivered presentations to the board and answered questions. Following this meeting both groups were asked to present their best and final offer.
P. Capital Senior Housing increased its offer to $3,525,000. Its offer was higher and its terms were better than the other offers.
Q. On or about July 28, 2015, the Town and Capital Senior Housing mutually execute a letter of intent. Since that time, the Town and Capital Senior Housing have been actively exploring different environmental remediation structures and actively negotiating the recently completed purchase & sale agreement.
In light of these extensive marketing efforts, I’m comfortable recommending CSH’s $3,525,000 offer as the highest and best offer in the marketplace and urge the Board to accept this offer and pass the resolution authorizing you to sign the contract.
Harold J. Bordwin, Principal and Managing Director