The Port of Ridgefield, having second thoughts about last year’s sale of a key industrial property, is about to repurchase the property at a little more than its original sale price after a development plan by the land’s purchaser failed.
The ports says it expects to buy the 10.5 acres of industrial-zoned land on South 11th Street from ROK Ridgefield Industrial LLC, which bought the land in May 2014. The land development corporation is headed by Elie Kassab, president of Vancouver-based Prestige Development.
The unusual turn of events solves a problem for the developer and creates a new and unexpected opportunity for the port. Kassab’s firm purchased the property with plans to build an industrial building with about 100,000 square feet. The contract required the ROK development firm to make “significant progress” by September of this year. A failure to do so could lead to a $1 million non-performance penalty, the port stipulated in the original deal.
Kassab’s prospective tenants failed to execute lease agreements, and Kassab explored more immediate development opportunities. As a result, he expressed an interest in selling the property back to the port, according to port officials.
The port says the repurchased land can be combined with another port project at a site on the north side of 11th Street, where it has secured permits for a 112,000-square-foot industrial building. The properties are located near the Ridgefield Industrial Park that houses Agave Denim and Parr Lumber.
The buyback process began on Aug. 12, when the port commission launched a due diligence process with the intention of buying the land for $1,421,952, which is $150,000 above last May’s sale price. The higher price takes into account the cost of pre-development work including site planning and design for the site, the port said in a news release.
The timing of the transaction was right for the port, which now is in a stronger financial position than it was at the time it sold the property thanks to financing it secured through Banner Bank, Grening said. The port initially sold the land to finance a road to the other property it wanted to develop, he said. The road likely increased the value of the land the port is repurchasing, the port said.
Grening said the port generally prefers to develop its industrial land and lease it to tenants. But it hasn’t decided whether to develop the land it’s buying back or to get development permits and sell it again, he said.
The port expects its due diligence process to be completed by August 21 and the deal is expected to close by the end of the month.
