AG 2004 10 18 - Laserfiche WebLink

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tasks. Some of those tasks provide for some purchaser discretion. The Bost Offer provides that at the end of the due diligence period, the deposit money goes "hard" for the County if Bost does not waive or declare unmet any unfulfilled contingencies at that time. Therefore, unless Bost finds issues during the due diligence period of 60 days and brings those to the attention of the County, the Bost deposit goes "hard" at the end of 60 days and Closing must occur within 60 days from the end of the due diligence period. Closing is proposed to occur within 120 days from the time a definitive agreement is entered into with Bost. The Craven Offer proposes a due diligence period of 180 days with the criteria for due diligence in the sole discretion of the Purchaser. The deposit money under the Craven Offer does not go "hard" until Closing. Bost Offer due diligence provides for the successful negotiation of renewal or termination of the current Property leases. The Craven Offer provides that Craven can elect whether they take an assignment of the lease(s) Of the Property. The lease(s) provide for quiet enjoyment of the tenants, which means if the tenant is complying with the lease terms, they have some protections from being terminated early. The Craven Offer provides if the Property is destroyed or damaged prior to Closing, Craven can elect to still close on the Property with the purchase price reduced by the aggregate total of any insurance proceeds due the County by reason of such damage and by the amount of the County's insurance deductible, with the County assigning all insurance proceeds to Craven. The Bost Offer provides that Bost can elect to close and shall receiv~ the insurance proceeds due to such destruction. It does not address the deductible issue. I have discussed this matter with David Lawrence at the Institute of Government. Mr. Lawrence advises that in general, the BOC is charged with the responsibility of getting the highest value possible for County property. However, in this case, the Board must also consider whether the Craven Offer is an acceptable upset bid. Even though the offered purchase price is higher, other terms and conditions of the upset bid advertisement have arguably not been met and certain terms of the Craven Offer may not be acceptable to the Board. Mr. Lawrence enforces that a governmental entity cannot be forced to sell its property. NC law provides that the County may reject both bids. County advertisement for upset bid reserves the right for the County to reject any and all bids. A suggestion was advanced that Craven be allowed to amend its bid to add the specific term omitted and also conform to certain other requirements. Mr. Lawrence 'does not recommend amendment of bids once the upset bid deadline has passed. If you consider allowing one bidder to amend an otherwise unacceptable bid, you run the risk that another bidder may object to only one bidder being allowed this option once the process has been started. Frayda Bluestein at the Institute of Govt. also strongly advises against allowing one bidder to amend unacceptable terms without allowing all bidders the same opportunity. She states that under such circumstances, you must consider primarily what is fair to ALL bidders and not what the most expedient solution would be. If the Board elects to reject the Craven Offer yet wishes to continue the bidding for the Property, the lOG suggested solution is to reject both the Bost Offer (because it is now too low) and the Craven Offer (because substantive terms in this offer are not agreeable) and start the upset bid process over, with a minimum bid of $1.3 million. We would be publishing an upset bid notice anyway, if you accepted the Craven Offer. Also, since it is now apparent that certain bidders will ignore the bid requirements that the offer must be substantially similar to the Contract, if the Board chooses, I can also draft a "blended" form contract that all bidders must use, using the Bost Offer and the Craven Oflfer terms that best suit the needs of the County and provide a reasonable blending of the two. Therefore, the only term that would change going forward would be the price offered. The risk in this route is that neither bidder comes back to the table. Mr. Bost and his Counsel, Mr. Mills, have already called this office and stated they want to know when the new upset bid process begins, because they do not want to miss a ten day deadline. Mr. Craven has also inquired about the status of this matter and expressed still having an interest in the . Page 2 £-~