Title
Staff Update, Board Discussion, and Possible Action Regarding Request to Extend Completion Date for Sellmark Corporation Expansion
Requested Action
Request to Extend Completion Date for Facility 1 and Facility 2
Recommendation
Defer to Board
Description/History
In 2010, MEDC entered into an Economic Development and Performance Agreement with Lonejack, LLC (aka Sellmark) to assist with construction and expansion of their facility located at 2201 Heritage Pkwy (lots 2 and 3). This agreement required Sellmark to begin construction on lot 3 by June 30, 2018 and obtain a certificate of occupancy by December 31, 2019. Due to some unexpected delays, Sellmark requested an amendment to the original agreement. The MEDC Board agreed to the extension and entered into a new agreement with Lonejack in 2018.
In October 2018, the MEDC Board granted a partial assignment from Lonejack, LLC to Lonejack II, LLC for Facility 2. Lonejack, LLC still holds ownership rights to Facility 1.
In the 2018 Economic Development and Performance Agreement, Sellmark agreed to purchase lot 4 for the 2017 appraised value of $809,600 and receive reimbursement in that amount on a per square foot basis as certificates of occupancy are obtained on 200,000 square feet of new construction. The existing agreement requires 33,000 square feet to be added to their existing facility (Facility 1) while the remaining 167,000 SF spec will be built on lots 3 and 4 (Facility 2). Initially, the space on lots 3 and 4 will be leased out until Sellmark has a need for the additional square footage.
In August 2019, Sellmark requested an extension for Facility 1 expecting to break ground later that year. The MEDC Board granted that extension with a new completion date of December 31, 2020.
Earlier this year Pier 1 announced the closure of their distribution center located at 2200 Heritage Pkwy, across the street from Sellmark. Lonejack II, LLC purchased this property for approximately $18,000,000. They are actively pursuing a tenant and will be improving the building as needed. Such as, new roof or repair, painting the building, new truck court, etc. Once they have a tenant they plan to begin Facility 2.
Sellmark is now requesting to extend completion dates for both Facility 1 and 2 as follows:
1. Receive certificate of occupancy for Facility 1 (33,000 SF expansion on existing facility) from December 31, 2020 to June 30, 2022.
2. Receive (or Tenant(s) must receive) certificate of occupancy for Facility 2 (167,000 SF spec) from December 31, 2021 to June 30, 2023.
Justification
Funding Source
N/A
Prepared By
Laurie Fleiner, MEDC, 817-728-3653