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Council reviews purchase agreement and long ground lease for 1771 Columbia Blvd. site
Summary
City legal counsel Jeff explained on July 16 that the PSA for 1771 Columbia Boulevard sets a $1.25 million purchase price, ties closing to the seller’s requested timeline and uses a long ground lease granting the city owner-like rights while fee title is delayed.
City legal counsel Jeff walked the council through a purchase-and-sale agreement (PSA) and an associated long‑term ground lease for the property at 1771 Columbia Boulevard during the July 16 work session.
Jeff said the PSA sets a base sale price of $1,250,000, subject to a $25,000 downward adjustment if the seller accelerates the closing, and includes an indexing clause that adjusts the price for inflation beginning on the third anniversary of the agreement. The seller has requested a delayed closing mechanism that ties the closing trigger to the death of the principal owner of the seller entity, which Jeff identified as Wayne Weigandt (the seller’s owner as listed in state records).
Why it matters: The agreement structure allows the city to begin site work and construction on the planned project without immediate fee title by executing a ground lease. At the same time, once the city proceeds past its 90‑day due‑diligence period and into the ground lease, counsel warned the city would be effectively committed to closing and could be sued for specific performance if it later attempted to walk away.
Key terms and timeline
Jeff said the PSA gives the city a 90‑day due‑diligence period to evaluate title, environmental and other site risks. If the city notifies the seller before day 90 that it intends to proceed, the seller must terminate tenancies within a 35‑day window so the city can take possession under the ground lease while waiting for the eventual fee-title conveyance. If the seller accelerates closing (for example through a 1031 exchange), the sale price can be adjusted downward by $25,000.
The ground lease functions as a financing substitute, Jeff said, and provides the city near‑owner rights so it can construct and maintain improvements while the seller retains legal title until the PSA closing. Rent under the ground lease is set at $6,250 per month (triple net and CPI‑adjusted), with the lease term structured to extend automatically until the PSA closing occurs and to protect the city’s improvements from being lost if there is litigation or delay.
Council questions and next steps
Councilors asked for clarity on the seller’s obligation to remove personal property and trailers from the site; Jeff said the seller must deliver the property vacant per the timetable in section 22 of the PSA, and the city can terminate if the seller fails to comply. Councilor Herman asked whether the seller will be required to leave the site clean of residual paraphernalia; counsel recommended the city set expectations and document any marginal items during diligence.
Ending: Counsel recommended standard due diligence and the council directed staff to proceed with review; no sale closing or final action occurred at the meeting.
