USU MoabDevelopment Lease

DEVL #1208

• Overall Project Update

• Proposed Lease Terms

USU Moab

Lionsback

USUCampus

Millcreek Drive ExtensionRenamed to ‘Aggie Way’

USU-Moab: Phase 1 Campus Building Concept

USU-Moab: Phase 1 Campus Building Concept

USU-Moab: Phase 1 Campus Building Concept

USU-Moab: Phase 1 Campus Building Concept

SITLA Master Plan

• SITLA controls 320 acres surrounding USU Moab Campus

• USU Moab Campus to focus on classroom and administration buildings

• SITLA to provide housing, commercial and transitional uses

• Developable: 65+/- acres (slope/site constraints)

• 1,180 Residential Units:

• 425+/- Student Housing/Apartment Units

• 630+/- Traditional Multifamily Attached Units (Townhome/Condo)

• 125+/- Single Family Units (Patio Home, Traditional SF)

• 2.2 Acres of Transitional/Commercial Use

Developer Information

GWC Capital, LLC was selected and approved by the Board of Trustees

• SITLA’s current development partner for Desert Color (St. George)

• Can act as ‘Master Developer’

• Finalize city entitlements, site earthwork, infrastructure, and utilities

• Able to partner with multiple builders (specific to each product type)

• Recognize and committed to a 20-year build-out

• Developer is invested in the project and has completed since January the following:

• ALTA Survey Completed, Conceptual master plan is being updated

• Has coordinated with USU-Moab, DFCM, and USU’s Architects and Engineers

• Completed engineering design of critical waterline connection and is ready to start construction of the waterline so that USU can meet their schedule of breaking ground by July 2020

Lease Deal Points

• Term: 20 years with two 5-year renewal(s) if GWC is meeting milestones

• Due diligence period through June 2021

• Break ground on 1st phase by July 1, 2021

• May not commence construction on a new phase until 60% of the current phase is complete and sold,

• Must commence final engineering, final plat, and construction of next subsequent phase when 80% of the current phase is complete and sold,

• Phase restrictions have separate considerations for product type and product price point,

• 3 year stagnation limit unless economic conditions warrant delay which are mutually agreed upon by both parties,

• Annual rent: $1,000/year without reduction or offset until all property has been sold

Lease Deal Points (con’t)

• Purchase/sale structure (revenue paid by GWC to SITLA):

• Improved Residential Lots (SF and MF): 30% of Gross Sales Price

• Finished Residential Home (SF and MF For-Sale Products):

• 7.5% of Gross Sales Price for years 1 - 5

• 9.0% of Gross Sale Price thereafter

• Improved Parcel for Commercial, Condo, Apartment or Mixed Uses: 45% of Gross Sales Price. SITLA reserves the right to participate in a joint venture with developer by contributing the land value

• Developed Park and Amenity Space: $25,000/ac for developed park and amenity space

• Unimproved Open Space: $2,000/ac for unimproved open space

• Undevelopable land: $100/ac minimum or 50/50 split of additional value obtained through conservation easement or other means

• Phases may be purchased with an initial payment of $40,000/ac (for developable acreage), and the ‘reconciliation payments’ to be calculated based on the number of units within each phase.

Lease Deal Points (con’t)• Coordination with USU Moab: Developer to work with USU Moab to

resolve concerns and coordination issues between residential and campus development.

• Key goal: Create development plan for a strong ‘University Neighborhood’ that benefits from the USU Moab campus. Therefore, the campus and developer projects will need to integrate the use of compatible architecture, site design, pedestrian and vehicular connectivity, landscaping, lighting, signage, walking and bike paths, open-space amenities, and programming.

• Shared Infrastructure: Developer to lead the final engineering design, coordination and shared-cost analysis of the remaining major infrastructure for the overall campus and residential development:

• Extend Aggie Blvd to the south through the campus into the southern portion of the SITLA parcel and to the connection point on Francis Drive/Hwy 191.

• Other shared infrastructure: water and sewer systems, road surface improvements, and future widening of Aggie Blvd when needed.

• Reimbursement Agreements: Developer (with SITLA support) to negotiate with USU Moab and City of Moab on timing, costs and funding of shared improvements, and any necessary reimbursement agreements.

Conclusion

• Monetary Consideration

• Developers pro-forma shows a total gross revenue to the Trust of approximately $11.5M (conservatively) over the next 20yrs

• NPV of $5M +/-

• Staff Request: Move to approve Development Lease #1208 terms with GWC Capital, LLC for the USU Moab Project as outlined in the Board memo.

Questions?