Homestead council directs manager to gather facts on $50M Bluenest letter of intent for mitigation property
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Summary
Council authorized the city manager to hold preliminary discussions and gather documentation about a $50 million nonbinding letter of intent from Bluenest Development LLC to buy roughly 530 acres of the city's mitigation property, citing extensive conservation easements and a separate right-to-match held on a 160-acre portion by VSGS.
Mayor Lawson opened the special-call meeting to consider a nonbinding letter of intent from Bluenest Development LLC offering $50,000,000 in cash for the city's mitigation property and asked staff and the city attorney to advise on next steps.
City Manager (on the record) summarized the offer: “He proposes a purchase price of $50,000,000 payable in cash at closing with an inspection and due diligence period of 9 months for a certain city property located on the East Side of the city, comprising approximately 530 acres,” and the city attorney warned large portions of the parcel are encumbered by conservation easements and that a 160-acre portion carries a 10-year right to match held by VSGS.
Council members debated whether to seek an appraisal now or first require the proposer to disclose its mitigation plan. Councilwoman Avila urged an appraisal and said the LOI describes a light-industrial vision with “0 residential,” but also supported simultaneous negotiation and appraisal. Mayor Lawson and others said an appraisal without knowing what federal and state agencies would require to remove easements could be misleading and costly, noting the city might incur “tens and tens of thousands of dollars” in legal and appraisal fees.
A counsel representing the proposer told council the developer had spent months on due diligence and would assume mitigation risk under its proposed timeline, saying the proposer would forfeit its deposit if it could not meet the 270-day schedule. The mayor said he would not support further consideration unless the proposer met with the city manager and city attorney to explain its mitigation path.
After additional discussion about valuation approaches ("as-is" value versus value with mitigation removed), fill-pit acreage and how to treat the 160-acre right-to-match, the council moved to direct the city manager to pursue preliminary discussions and fact-finding with the proposer and report back. The motion carried with no recorded opposition.
Next steps: staff is to meet with the proposer to review its mitigation documentation and to return to council with findings so members can decide whether to order independent appraisals or negotiate terms including potential deposits or cost-sharing for due diligence.
