Frisco selling Whole Foods site to developer for below market value
May 26, 2013
The Frisco Town Council is on track to sell the Whole Foods project site to a developer for roughly $2 million less than market value.
At an emergency meeting Wednesday, the council approved the first reading of an ordinance to sell what's known as the "Interstate Parcel," located between Interstate 70 and Lusher Court, to developer David O'Neil and his firm, Brynn Grey X LLC for $4.5 million. The property was appraised at $6.75 million in April 2011.
In spite of the discrepancy in market value, Frisco town manager Bill Efting said the sale was "fairly comparable" financially to the 2012 lease agreement the land deal would terminate. Frisco officials said the terms of the development project itself would remain unchanged.
"I think the developer is getting a fair deal, and I think the town of Frisco is getting a fair deal," Efting said.
The original lease agreement provided an option for developers to buy the property within the first 10 years of the lease.
Efting said O'Neil approached the city about seven weeks ago with the desire to buy the land. Since that time, Efting said Frisco employees, council members and attorneys have been negotiating the sales terms behind closed doors during the council's executive sessions.
Community members who attended Wednesday's special council meeting expressed concern the property sale didn't seem to be thought out.
"I don't know why the rush. Why are they so desperate to make this happen so quickly?" said Larry Feldman, a Frisco resident who has been involved in several development projects in Summit County, including the Dillon Ridge Marketplace. "Even though Whole Foods may be a good use for the property, I think the deal the town is making is wrong."
Frisco resident Paul Connelly called the sales process "scandalous," stating that the council kept the sale "under wraps," talking only in executive session and issuing the bare minimum in public notices and comments.
Developer David O'Neil disagrees, saying the council has been thoughtful and transparent in its decision making throughout the development planning process.
"This council has put in a huge amount of time and has been extraordinarily deliberate," he said. "The town is getting excellent return on that asset."
City officials said there were factors to consider beyond the appraised value of the property, including the value of community buy-in for the project. The land has sat dormant because community members couldn't agree on a use for the property, community development director Jocelyn Mills said.
"We saw something we've never seen before relative to this property with people being supportive," Mills said. "It was a complete turnaround."
Town representatives expect to get about $1 million in sales tax revenue every year from the development of the Whole Foods supermarket and accompanying enterprises. The school district, county, Colorado Mountain College and Lake Dillon Fire-Rescue all will benefit from taxes accrued through the project, officials said.
Efting said the council's approval process has been sped up slightly to stay on track with the timing of the development. Town representatives said they didn't want to lose momentum on the project.
"Every year that you lose, or wait for a new project to come along, you have lost a million dollars in revenue," he said. "If you delay the project two to five years, that's potentially $5 million that you have left on the table."
Frisco Mayor Gary Wilkinson said he felt confident with the terms and process of the property sale.
"I feel comfortable and I want to ensure that everyone else on council understands it as well," he said.
Council members will have a chance to discuss the sale before their final decision during their meeting Tuesday.
"It will definitely be on the agenda, and I hope to facilitate that so everyone understands what we are doing and there is no confusion or questions," the mayor said.
The council meeting is open to the public and will be in the Frisco Town Hall building, 1 Main St., at 7 p.m. The agenda can be found online at http://www.friscogov.com.