Fiscal Note
The proposed resolution authorizes the first amendment to the Option to Purchase agreement between the City of Madison and Tri-State Custom Construction, LLC related to four residential lots within the Owl Creek Subdivision. The original sale of the lots included an option for the City to purchase back lots on which developers did not complete construction of single-family dwellings. The original agreement with Tri-State Custom Construction, LLC was approved via legislative file 63906. The second amendment proposed here extends the expiration date to December 31, 2027, to allow the developer more time to complete construction of new homes on the lots. No additional City appropriation required.
Title
Authorizing the City’s execution of a First Amendment to Option to Purchase, between the City of Madison and Tri-State Custom Construction, LLC, for the purpose of extending the City’s option to repurchase certain residential lots within Owl’s Creek Subdivision. (District 16)
Body
WHEREAS, pursuant to the terms detailed in a Purchase and Sale Agreement (“Agreement”) authorized by File ID No. 63906, Resolution Enactment No. RES-21-00150, adopted by the City of Madison (“City”) Common Council on February 23, 2021 (“Resolution”), in 2024 the City sold four vacant residential lots within Owl’s Creek Subdivision (“Lots”) to Tri-State Custom Construction, LLC (“Seller”); and
WHEREAS, the Agreement included an Option to Purchase (“Option”), giving the City the option to repurchase any of the Lots on which the Seller did not complete construction of single-family residential dwellings within two years of the date the Seller’s purchased the Lots from the City; and
WHEREAS, as stated in the Resolution, the City’s goals in disposing of the Lots included providing “stability to the Owl Creek neighborhood, construction jobs in a time of economic challenge, and provide the City with revenue to reinvest in affordable housing” (“Goals”); and
WHEREAS, due to construction challenges including nonperforming contractors and needing to perform corrective work, as well as unexpected additional construction costs to the Seller, construction progress was delayed; and
WHEREAS, the Seller has largely completed one home on one of the Lots and has made progress on others, though requested more time to complete construction on all of the Lots; and
WHEREAS, to continue the progress toward achieving the City’s Goals and grant the Seller more time to complete construction, City Office of Real Estate Services staff support amending the Option to extend the expiration date fifteen (15) months to December 31, 2027, as detailed in attached Exhibit - First Amendment (“First Amendment”); and
WHEREAS, City staff also recommend amending the Option to include language allowing the City to exercise its option to repurchase all or a portion of the Lots prior to December 31, 2027, in the event the Seller does not demonstrate consistent progress towards completing construction of homes on the Lots.
NOW, THEREFORE, BE IT RESOLVED that the City’s Common Council hereby authorizes the City’s execution of the First Amendment subject to materially, though not exclusively, the terms and conditions found in the First Amendment, on a form and in a manner that has been approved by the City Attorney.