Facts & Assumptions:
1. EWUA owns land (0.65 acres) with improvements (A ‘housing unit’, plus a ‘bunkhouse’) on Center Court.
2. EWUA has an option to affect a boundary line modification (BLM) and acquire 1.05 acres at a price of $ 550,000 immediately adjacent.
3. Steve Smith would like to create the formation of housing in Eastsound – and Steve also was the architect of both the purchase of Center Court and the option agreement entered.
4. Steve has indicated he needs all 1.7 acres of both properties to achieve the density that makes a housing development financially feasible.
5. EWUA does not wish to be involved directly in housing development – other than for a small number of units for its employees on the Center Ct property.
6. EWUA seeks to limit its risk exposure by every means possible.
Strategy for Consideration (originally proposed by Steve in slightly different form)
· EWUA exercises its option and creates a 1.7-acre combined parcel owned by EWUA (effective in Spring, 2023)
· Funding for the exercise of the option is secured by Steve in the amount of $ 550,000 – i.e., Steve contributes or raises the funds independent of EWUA.
· EWUA owns the 1.7 acres after exercise of the option but agrees (via a legal agreement to be negotiated) to transfer the property in full to an entity created by Steve.
· The agreement specifies (in part) that the transfer will be for a sum of $ 585,000 (the amount EWUA paid for Center Ct) plus an amount for certain costs incurred by EWUA in facilitating the transfer.
· As part of the agreement EWUA is given a lease interest in the physical structures on the existing Center Court property for a period of years.
· EWUA is also provided a single unit in the completed development that Steve will create.
· If Steve is unable to move forward with the purchase of the full 1.7 acres from EWUA in a time agreed to, the agreement terminates and EWUA retains the property in full.