consultants are sandburs

Thursday, December 18, 2014

"Ramsey accepts offer to sell old municipal center site."

[UPDATE NOTE: This report relates to the former City Hall on Nowthen by Ramsey Elementary School. Not the historic building next to the bank on the west side of Hwy. 47 north of Hwy 116.]

The above headline is the headline given ABC Newspaper reporting online here.

"NIK Management Group" is mentioned in the ABC item, and in an online Ramsey agenda, here. In an agenda addendum a different but close name is given; and there was no online Secretary of State listing found for any venture or assumed name exactly as given in the ABC report. The agenda identifies NIK Management Group as "management arm for Bridgeland Development INC."

So, who is the ostensible buyer?

SoS listings identify two entities with names beginning "Bridgland ...".

The SoS listings did include a "Nik Enterprise Ventures, LLC." Whether that's related to Bridgeland or not is unclear. More likely related, "NIK MANAGEMENT, INC."

Again, who is at risk per the offer noted in the agenda? If the deal flips, who do you sue? Or as is more likely, the offer has some contingent escape clause, some condition subsequent to offeree acceptance. With the agenda noting a closed session consideration, and with neither offer being part of the agenda, that's only a guess as to escape clauses and conditional offering. But it likely is a good guess.

The linked agenda has this addendum describing the offeror as NIK MANAGEMENT, INC.

Names do matter, and the ABC reported name and the agenda[addendum] reported names differ enough to note that this is not pitching horsehoes where "near" matters more.

With an email address: nealkay@live.come, that could be anyone but it most fits the SoS entry for NIK MANAGEMENT, INC.

Aside from the offeror name confusion, the ABC Newspapers report gives detail omitted here, so readers are urged to go to that resource.

D. R. Horton submitted an offer, and it is not presently clear from reporting or the agenda whether they remain in a back-up offer status, should the NIK deal for any reason flip. Presumably that is so, but the old saying about many a slip twixt cup and lip could include a flip without a backup blip.

Not throwing caution to the wind is always a wise thing. NIK appears, from addendum materials, to be presently attempting marketing of a multi-apartment project, apparently so, in Williston, ND.

With oil now under $60 per barrel and uncertainty as to how the drop in crude pricing will affect the North Dakota oil boom, due diligence on the part of Ramsey's real property marketing agent, in bringing an offer in such a posture, might include its sniffing around that situation.

It is not as if a first-rate nationwide operation such as CBRE is incapable of checking out the question of liquidity of the offeror, given the Williston red flag.

____________FURTHER UPDATE_______________
If for any reason, including neighborhood sentiment, the deal does flip; what's the harm?

That is a proper perspective to keep with the key development worry (a half built thing) less relevant for detached single family housing than for something like the Flaherty Town Center rentals project. Also, detached single family development has traditionally been by private financing, i.e., unlike something like the Flaherty Town Center rentals project.

There is a lot to be said on getting a good price for the property, then getting out of the way and letting developer risk/reward gambling do its thing. If the land is sold at a discount, or other indirect subsidy given, the deal is less appealing than otherwise.

And, cash upfront, for land - rather than payments as and when lots are sold to builders, or however else this developer proceeds - is always best from a pure seller perspective. With it publicly owned land, there is an unavoidable policy dimension at play. But folks need places to live, so policy issues should weigh less against this kind of development.

Policy aims should be for a transparent process where neighbors get their chance to voice a choice. However, there the adage if you want to control the adjacent vacant land you buy it, has to apply in that neighbor objection killed the likelihood of the land being developed as a data center. Only so many bites at the apple are properly accorded adjacency. There needs to be a balance between neighbor sentiment and town sensitivity to it, and the interests of the entire public (taxpayers) in getting cash for unused town-owned real estate while getting the town out of real estate development as completely and quickly as is reasonably possible.

Last, it appears that adjacent housing is of a sewer/water lot-size kind, with new housing to be the same, so that a key issue from past times, density transition, should not be relevant to this sale. Neighbors should look at proposed density, that would be the wise thing for them to consider in terms of impact upon their own property values and their enjoyment of their own properties, yet as the agenda was written, detached single family homes were the proposal, not anything involving dense, shared-wall housing. [ADDED NOTE: There is shared wall housing in the vicinity of the land; on the triangular land bordered by Alpine, Nowthen Blvd., and Sunfish Lake Blvd. However, south of Alpine single family housing is the norm. Immediately adjacent to the old city hall land, that housing is understood to be all detached single family density.]

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