The agreement between the city and owners of Johnson’s Pasture that gave the city an exclusive first shot to buy the 180-acre open-space parcel lapsed Friday, Mayor Peter Yao confirmed Friday afternoon.
With the agreement no longer in effect, the owners can, if they choose, sell the land to a residential developer despite voter approval of Measure S, which achieved 71-percent support and authorized the city to issue up to $12.5 million in bonds to purchase the land.
The city declined a $50,000 option that would have extended the agreement an additional two months so it could renegotiate with property owners in an attempt to get the purchase price lowered from $12 million to $11.5 million to secure a $1 million state grant.
“We have placed an offer to them for $11.5 million dollars, so continuing the option works in contradiction with the new offer we placed to them,” Mayor Yao said.
A representative for the property owners contacted at about 1 p.m. Friday would not comment on the purchase agreement lapse because the contract was scheduled to remain in effect until 5 p.m.
“I’m surprised [the city] called the media on this before they called the owners,” he said.
Mayor Yao said the city will offer an adjusted package to the owners that he feels is a better deal than the original $12 million, because the new offer includes several other forms of compensation besides the lowered $11.5 million.
He declined to specify the additional forms of compensation, citing the secretive nature of the ongoing negotiations.
“We still think that we have a very viable and very attractive offer, and very few people can basically pay cash outright for the property,” he said, “so we’re hoping they will take a second look at it and continue negotiating with the city.”
Besides the financial benefits of receiving the $1 million grant from the state, city officials said that failing to secure the grant would send a message to the state that it is not a reliable partner.
“It is absolutely essential that we work with the state, not only with this piece of land, but with the hundreds of acres we hope to acquire in recent years,” Mayor Yao said. “If the state feels like we are snubbing them by paying over market value, it would be unlikely they would assist us on any future acquisition. And the $11.5 million is the state’s assessment of what the fair market value is.”
Though there is no formal deadline to which the city is adhering to purchase Johnson’s Pasture, Mayor Yao said he hopes an agreement can be made “as soon as possible. … We are working as expeditiously as we know how.”
The city council will meet in closed session Monday evening to give further direction to staff regarding strategy for the ongoing negotiations with property owners.
City officials say it is unlikely that the property owners will find a residential developer to purchase the land, because a developer will typically issue its payments over a 3-4 year period. The city, by contrast, will issue the money all at once when an agreement is met.
But the possibility now exists that the owners will sell to a party besides the city, and that scenario, Mayor Yao said, “If it were to happen, I definitely would feel very, very bad about it, but based on our strategy that’s not the scenario we see.”
—Will Bigham
