Fiscal Note
The proposed resolution authorizes the second amendment to the Option to Purchase agreement between the City of Madison and Gold Star Real Estate, LLC related to one lot within the Owl Creek Subdivision. The original sale of the lot 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 Gold Star Real Estate, LLC was approved via legislative file 63906. Legislative file 76480 approved the first amendment to the agreement and extended the expiration date on the Option to Purchase. The second amendment proposed here extends the expiration date to December 31, 2025 to allow the developer more time to complete construction of a new home on the lot. No additional City appropriation required.
Title
Authorizing the City’s execution of a Second Amendment to Option to Purchase, between the City of Madison and Gold Star Real Estate, LLC, for the purpose of extending the City’s option to repurchase a certain residential lot 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. 63907, Resolution Enactment No. RES-21-00151, adopted by the City of Madison (“City”) Common Council on February 23, 2021 (“Resolution”), in 2021 the City sold eight vacant residential lots within Owl’s Creek Subdivision (“Lots”) to Gold Star Real Estate, 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 include 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 challenges related to COVID-19 during 2021-2022, including the limited availability of building materials and skilled labor, construction progress was slowed so the City extended the Option term by two (2) years, as authorized by File ID No. 76480, RES-23-00264; and
WHEREAS, the Seller has nearly completed the construction of all homes on the Lots, but is experiencing continued delays, citing ongoing labor challenges, and therefore the Seller has requested more time to complete the construction of the final home; 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 to December 31, 2025, as detailed in attached Exhibit - Second Amendment (“Second Amendment).
NOW, THEREFORE, BE IT RESOLVED that the City’s Common Council hereby authorizes the City’s execution of the Second Amendment subject to materially, though not exclusively, the terms and conditions found in the Second Amendment, on a form and in a manner that has been approved by the City Attorney.