HomeMy WebLinkAbout1993 05 11 - Letter from GDU to CityGeneral Development Utilities. Inc.
An Atlantic Gulf Communities Corporation Subsidiary
2601 SOUTH BAYSHORE DRIVE
MIAMI, FL 33133-5461
(305)859-4331
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Mr. Robert S. McClary Re
Cejyed
City Manager \� offic 8 8
City of Sebastian
P.O. Box 780127 `�
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Sebastian, Florida 32978 �tzsz5
Re: Sebastian Highlands System
Dear Mr. McClary:
51MI
Charles E. Fancher, Jr.
PRESIDENT
May 11, 1993
After having considered the City of Sebastian's offer to purchase the General Development
Utilities, Inc's. (GDU) Sebastian Highlands System, GDU's Board has determined it will
not accept your offer. However, I have been authorized to advise you that the Board would
favorably consider an offer of three million, two hundred fifty thousand dollars ($3,250,000)
payable in cash at closing.
I know the offer of $2.75 million was viewed as being justified in part by considering one
interpretation of the purchase formula referred to in section 16 of the franchise agreements
between GDU and the City. When you average the book value of the system of
approximately $3.5 million and the appraised value of approximately $2.0 million prepared
by Hartman Associates, the City's consultants, the result is $2.75 million.
The franchise agreement calls for three appraisals to be performed. The only other
appraisal that currently exists for this property results in a value of $4.3 million, and was
performed by the property appraiser for Indian River County. The average of the GDU
book value with the average of these appraised values results in a figure of $3.325 million
calculated as follows:
[ $3.5 + [$2.0 + 4.3) /2 ] /2 = $3.325
This calculation, which does not use any appraisals performed at the request of GDU,
supports GDU's offer to sell the Sebastian Highlands System for $3.25 million. While other
details of the transaction would need to be clarified, I believe all could be worked out.
I need to have a response from the City within 30 days of your receipt of this offer.
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Robert S. McClary
May 11, 1993
Page 2
In the meantime, please call should you wish to discuss anything further. I look forward
to a mutually satisfactory resolution of this matter.
Sincerely,
G'
Charles E. Fancher. Jr.
CEF:gi
cc: J. L. Rutherford