County accepts $18M offer on old WHS
by Kellen Moore
The proposal includes a 5 percent commission to be paid by the county at closing to Rick Miller of Miller Properties, the buyer's agent, which would make the net income to the county $17.1 million.
The initial plans for Campus Crest
Development call for 250 to 500 student apartment units, along with retail
space, Miller said earlier this month.
But the process is far from complete, as the acceptance of the bid will trigger an upset bid period in which another purchaser could override the previously accepted offer. Commissioners said Wednesday they expect one or more upset bids.
“This is a win-win for the county citizens,” said Chairman Nathan Miller, who is not related to Rick Miller. “We look forward to working with whoever the final bidder is.”
The vote Wednesday ended discussion that started at Tuesday’s regularly scheduled commissioners meeting, where the board considered two offers: a $17 million offer from Campus Crest Development and a $16.6 million offer from Sanctuary Management of Georgia.
Place Acquisition and its agent, Tim Hagaman, presented an offer of $15.5 million earlier this month but did not return with a revised offer at Tuesday’s meeting.
“They said they may be interested in the potential upset bid process,” County Manager Deron Geouque said.
Much of the discussion Tuesday centered on how the county wished to handle the commission paid to the successful agent or agents and how much the county would net after subtracting that commission.
The board voted 3-2 along party lines to pay a commission only to the realtor that brought the final, successful offer at the end of any upset bid process. Democrat Jim Deal, who voted against that “winner takes all” motion, said he favored providing a portion — possibly 10 percent of the commission — to the agent who made the initial accepted bid.
“That recognizes the efforts of the initial person that got the ball rolling,” Deal said.
The county’s original notice of sale stated that a 5 percent realtor commission would be split in the case of an upset bid process. That plan, and Deal’s motion, fell to the votes of Nathan Miller, Vince Gable and David Blust.
Campus Crest’s original offer requested a 10 percent commission for Rick Miller. After stepping outside briefly Tuesday evening to confer with Miller, company Vice President Andrew Young said they would drop the commission to 7 percent after commissioners indicated they found it too high.
Representatives from Sanctuary Management, which requested a 5 percent commission from the start, were not present at Tuesday’s meeting.
At those commission levels, the Campus Crest offer would have netted the county $15.81 million and the Sanctuary Management offer would have netted $15.77 million.
Seeing those figures, Nathan Miller pushed to accept the Campus Crest offer but did not find much support, primarily because of the 7 percent commission. As County Attorney Stacy “Four” Eggers explained, whatever commission the board agreed to in the initial acceptance would stay locked in throughout the upset bid process.
Aside from those concerns, Deal insisted that the commissioners have time to read the entire contracts, which were provided as the meeting began Tuesday evening.
“I don’t want to vote on something I haven’t read,” Deal said. “I can’t believe a commissioner would do that.”
When the meeting reconvened Wednesday, both offers had been reviewed and representatives for both companies were in attendance.
Robert Armstrong, a representative for Sanctuary Management, described that project as a higher-grade student housing community with a 35,000- to 45,000-square-foot grocery store. He would not say which store was being considered but that the store is not already present in Boone.
Armstrong requested an opportunity to improve Sanctuary’s offer since Campus Crest had the same chance the previous night.
After a brief break for the representatives from both groups to meet privately, both returned with their best offers regarding price, commission and the length of the inspection period.
At that point, Campus Crest raised its offer to $18 million with a 5 percent commission and 180-day inspection period, netting the county $17.1 million.
Sanctuary Management upped its bid to $16.8 million with a zero percent commission and 135-day inspection period.
With little discussion, commissioners voted unanimously to accept the Campus Crest offer.
Armstrong said he would like to receive notice of the upset bid process, noting that he had expressed interest in the project for several years previously.
Even after a final offer is reached, the deal could easily fall through. If the buyer cannot get the zoning changes, water allocations and other factors it needs from the Boone Town Council during the 180-day inspection period, the buyer could walk away without losing any money.
“For them, the unknown is what the town’s looking for and what the town will require,” Geouque said.