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Sarasota-Manatee
Business Observer Tuesday, Sep. 28, 2021 3 weeks ago

Developer raises offer for county building to $25M, sale negotiations underway 

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As leading bidder bumps offer, Sarasota County Commissioners allow administrator to continue negotiating sale of admin building
by: Louis Llovio Commercial Real Estate Editor

SARASOTA — Sarasota County Commissioners voted unanimously Tuesday, Sept. 28, to allow County Administrator Jonathan Lewis to continue negotiating the sale of its administrative building with east Manatee County developer Benderson Development Co.

With the commission’s backing, Lewis will continue working out the details with Benderson and return to commissioners with a purchase agreement for the building, in downtown Sarasota, and two adjacent properties they can then vote to accept or reject and start the process over.

University Park-based Benderson emerged as the leading contender after two rounds of negotiations that started with six potential bidders. The developer’s latest offer is for $25 million — $5 million more than it originally offered. It will also lease the county back the administration building for $1 million per year for four years. It originally offered to relocate the county’s administrative offices to a property near The Mall at University Town Center, in north Sarasota, outside Lakewood Ranch and on the border with Manatee County. 

The county began marketing the property earlier this year after a report found that it would cost $32 million to upgrade the current administration building at 1660 Ringling Blvd. and maintain it through 2031. On Aug. 20, the county received the six bids from developers interested in purchasing the building and the two adjacent properties — 1646 and 1703 Morrill St. Each of the offers topped $20 million and allowed the county to lease the building back for four years.

On Sept. 8, commissioners voted to allow county officials to begin negotiating with the six potential buyers to raise offers and narrow the field.

The county has focused on moving its administrative offices to county-owned land on Cattlemen Road, in northern Sarasota County which is near other county offices. Officials say the site, at 1301 Cattlemen Road, could work for a four-story, 120,000-square-foot building and parking for more than 300 vehicles while leaving room for future growth.

As was the case at the Sept. 8 meeting, a unanimous vote did not mean that everything went smoothly.

For the second consecutive meeting Commissioner Nancy Detert, who represents District 3, took issue with the value of the property, asking if the commissioners should not attempt to rezone the building to increase its value. The building, which is within city limits, is zoned for government use.

Detert argues that selling the building and the two properties for $25 million could cost the county millions in the long run because it allows the buyer to rezone the property and then reap the benefits, selling it for, she says, $60 million or more.

“To have a very, very old building in the middle of downtown on five acres that needs all kinds of work is not worth a whole heck of a lot,” she says. “But five acres in the middle of downtown Sarasota, a booming place to be in today’s real estate world, is worth a lot.”

And Detert raised another concern, one that if not addressed in the final purchase agreement could cause her to vote against the sale. The issue: who will pay for the repairs to the administration building? One of the main reasons the county is going through the process of selling the current building and building a new one is to avoid the millions it will cost to repair and upgrade the building.

She says that it should be the new owner’s responsibility to repair the building and not the county’s, that paying $1 million a year to rent the building then having to pay millions more to make the necessary repairs would defeat the purpose of the exercise.

“I would say, that is the point of taking this to the next level. That’s the type of thing we can request that Jonathan engage in," says Alan Maio, the commission’s chairman. "I am thinking this is our base rent. I don’t know if they’re anticipating hitting us with charges, common area maintenance. I don’t know if we are entitled to repairs. But that is something that Jonathan and his team need to bring up as these negotiations move forward.”

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