Matt Sapara, the city’s development director, speaks to the newly seated city council on Thursday at One Government Center. He apologized to members for the need for secrecy over the deal.
Acting with urgency — and a certain amount of secrecy — to avoid losing out to Michigan, Toledo City Council voted Thursday to sell 37 acres of city-owned land in Monclova Township to a local company that plans to invest $10 million in a new headquarters and factory at the site.
Council’s 12-0 vote — its first after the official reorganization because of the swearing-in of new members — allows the administration of Mayor D. Michael Collins to sell parcels at the southeast corner of Jerome Road and Technology Drive for $1.3 million to a local firm that was not identified.
Rudolph/Libbe Inc. of Walbridge, Ohio, requested the deal. It has a contract to erect a 100,000-square-foot facility, with an additional 150,000 square feet planned over three years.
Scott Libbe, executive vice president of Rudolph/Libbe, said the buyer is in Arrowhead Park in Maumee now and needs room to expand. He said the confidentiality was at the request of the buyer.
He said the company was looking at two other sites, in southeast Michigan and Perrysburg. While it said it is “enamored” of the Michigan site, it determined that Ohio was offering the best incentive. He said council had to act promptly or potentially lose the opportunity to Michigan. The details of the state’s incentive package were not disclosed.
Scott Libbe of Rudolph/Libbe, listens to the council meeting. Mr. Libbe apologized for keeping council in the dark. Mr. Libbe said the anonymous buyer, who needs room to expand, looked at other sites, including Perrysburg and Michigan.
“This is a very, very good project. I’m thrilled that they are interested in the whole piece of property so we can keep them here in Lucas County for decades to come, and they won’t get landlocked again, which is their current situation in Arrowhead Park,” Mr. Libbe said. He said the company has “tremendous growth potential.”
In addition to garnering the $1.3 million, the city is expected to realize about $100,000 a year in added tax revenue because the site is in a joint economic development zone. The headquarters, plant, and showroom would employ about 140 people after three years, up from the current 68.
Mr. Libbe informed incoming Director of Development Matt Sapara of the project on Dec. 17. He said the former administration of Mayor Mike Bell was cooperating, and it was a coincidence that the land acquisition occurs on the first day of the Collins administration.
Both Mr. Sapara and Mr. Libbe apologized to council for the lack of information.
Mr. Collins said the issue was brought to him before Christmas.
“The need to move forward was made known because there was a chance we would not have the deal in Triad, that they would move to Michigan,” Mr. Collins said. He said he doesn’t know who the business is.
He said he told Mr. Sapara last week to contact every council member and explain it to them.
“This is unusual, and it’s not the type of response we’re going to give council in the future,” the mayor said, adding that he likely would have been the most insistent in demanding additional information.
That job fell to new Councilman Larry Sykes who said he was uncomfortable with walked-on legislation and asked what plans the city had in case the buyer fails to move ahead. Mr. Sapara said the purchase agreement could include a clause allowing the city to repurchase the property if the unnamed company does not start work within a year.
However, Mr. Sapara said he believes the company plans to break ground in as few as six weeks.
Mr. Collins said the repurchase clause may not be as necessary as when he insisted on a similar clause when the city sold 69 acres of the Marina District to a China-based business partnership in 2011. Under that deal, which earned the city $3.8 million, Toledo can buy the land back in five years at the same price if no development has occurred.
“We’re dealing with what I believe to be recognized and known investors in the community,” Mr. Collins said, referring to Rudolph/Libbe.
Mr. Sapara said an appraiser agreed that $35,000 an acre was fair market value.
It was the first vote for the newly reorganized 12-member council after six elected or re-elected members took their oaths of office, and Democrat Matthew Cherry was appointed by council to replace former District 2 Councilman Collins.
The property is part of a 580-acre joint economic development zone involving the cities of Toledo and Maumee and Monclova Township, which share a 1.5-percent income tax. The acreage is adjacent to the Dana Holding Corp.'s headquarters on Technology.
Toledo bought 1,187 acres in Monclova Township in 1987 for $14.3 million with the goal of annexing it to the city, but courts rejected the annexation attempt saying the property was not contiguous with the city. The city has been selling off the property ever since.