City Council Agenda and Packet 2017 10 10 SP

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DRAFT- Strategies and Tools for Open Space Property Acquisition 12/10/2015 Summary: acquisition discussions between OSAB, Malcolm Fleming, and OS staff (with input from Boulder & Jefferson County OS staff) Tool Description How it works Advantages Disadvantages Real Estate Retainer A real estate retainer fee is paid upfront to engage a real estate agent by the city to ensure the commitment of the agent, and it does no guarantee an outcome or final product. The retainer fee is structured as an offset against the commission and is retained only if a deal fails to close. If the deal closes, the fee is returned to the client. While many large open space agencies have staff dedicated to land acquisitions, this is unpractical or unfeasible for smaller agencies due to cost and infrequency of opportunities. A smaller municipality could extend its reach through I established network of real estate brokers in the are. -al estate brokers tend to be the first individuals with k .ge of potential land coming on the market for sale, an. . h. elationships with landowners in the area. A muni4ality coul. ovide a select group of brokers its target acquisition list to either pursue transactions, or to simply keep the mucicipality abreast of potential target acquisitign opportunities. It is typical in the real estate industry for a seller to pay all brokerage commissions/c ensation. Expands the reach of smaller municipalities' on- staff resources at minimal additional costs, and may result in additional opportunities May result in a conflict if multiple brokers identify the same target acquisition at the same time, an event more common in a smaller municipality real estate market. Right of first refusal/Option A right of first refusal is a The right of firs fusal is a contr ct etween the buyer and seller Keeps the opportunity Money paid to the Agreement contractual right that gives its holder the which specifies that the land mae acquired by the buyer at a open, keeps the dialogue seller for the right of option to enter a business transaction with future date. This gives the municipality the opportunity to match going, inexpensive. first refusal/option is the owner of something, according to offered purchase price within a specified time period should a forfeited if the city specified terms, before the owner is andowner receive a legitimate offer to sell. A purchase option is cannot or will not entitled to enter into that transaction with a simply a right thate municipality holds to purchase the land by a purchase the land at third party. specified date at a specified price. A right of first refusal and a purchase option can be either donated to the municipality or sold. the specified time and price.