In about 90 days, the City of Port St. Lucie should know whether or not it will be out from under the former VGTI building. The clock is ticking for the buyer – RER Ventures – to perform its due diligence and make a final decision.
If all goes well, RER Ventures plans to purchase the former Vaccine and Gene Therapy Institute for $14.5 million.
The company is putting in $100,000 as an initial deposit, which it would get back if the sale doesn’t ultimately go through.
The Port St. Lucie City Council voted 4-1 in favor of approving the proposed purchase and sale agreement with RER Ventures.
Mayor Gregory Oravec was the lone dissenter, raising an objection to undisclosed information and questions regarding the appraisal of the property.
“These things come to bear in my mind” because of the type of deal hashed out with RER Ventures, the mayor said. The deal calls for the city to finance the sale; RER will make a 20 percent down payment, pay interest only over five years, and then make final payment of the remainder at the end of that term.
“I think he’s the real deal,” Oravec said of RER Ventures owner Christopher Kallivokas. “I think he’s a bona fide developer, the kind of investor we want in the city. But I will not be supporting this deal.”
Oravec explained that City Manager Russ Blackburn’s initial inclination when presented with Kallivokas’ offer was that the city should be able to share in the “upside” of the deal.
“I think his first inclination was right,” Oravec said. “I think Mr. Kallivokas is going to do a great job. I think he’s going to get tenants in the building. And I think in the next three to five years or whenever he decides to sell, he’s going to sell it for something between $24 (million) and $34 million or in that neighborhood.”
Oravec said that the building is worth more than the appraised $14.5 million – if it has tenants. He said he wouldn’t be able to look back and say he voted his conscious if he voted yes on the deal.
“I don’t think there’s a right or wrong answer on this,” the mayor concluded, adding he would provide his full support moving forward after the vote.
Councilwoman Stephanie Morgan also expressed uncertainty with the vote, questioning the closing costs and which party would be responsible for what and at what price tag.
When the vote was called, she responded, “Oh, this is tough” and paused for a few moments before ultimately voting to approve the deal with RER Ventures.
Once Kallivokas deposits $100,000 with the city, due diligence can begin. His company has 90 days to make a final decision. If he plans to move forward, he will make a second deposit of $200,000 as earnest money.
At closing, RER Ventures will make a down payment of $2.9 million.
“I just want to thank the City Council for all the serious consideration you gave to our proposal and our contract,” Kallivokas said, addressing the council after the vote. “I hope that the due-diligence period proves, confirms the beliefs I have now that this is a good opportunity for us and I hope that we will stabilize the building and create some good jobs in the community. And I look forward to being a part of this community.”