Sumner Meadows Golf Links, which has been a financial drain on Sumner City Hall for years, will likely be sold to an Iowa-based company for industrial development after the City Council approved a purchase-and-sale agreement Monday night.
The council voted 6-1 to approve the long-awaited sale of the city-owned golf course to Principal Financial, a global investment group.
The 154-acre property will be sold for more than $53 million. The city plans to immediately pay off its remaining $5.8 million golf course debt. Other money from the sale -- one of the largest single land transactions in city history -- will cover Sumner’s $5 million share of a new YMCA, scheduled to open in 2015, City Administrator John Galle said.
Additionally, the city will reimburse the utility fund that officials have been drawing from to support the golf course. Eventually, this could lead to lower utility rates for residents, Galle said.
Principal will likely develop an industrial park. Steve Kramer, a representative with Principal’s Bellevue-based partner KG Investment Management, said the company pinpointed the land for its prime location near the ports of Tacoma and Seattle.
Specifics on the type of industrial development are still up in the air, he said.
“We’ll be reacting to the marketplace,” Kramer said after the vote.
If everything goes smoothly, he said Principal would like to break ground in 2014 for full operation in 2015.
The land allows for a development as large as 3 million square feet. One possible project includes a so-called "fulfillment center" that distributes online merchandise to consumers, Galle said.
The agreement includes a commitment by Principal to pay an additional $9 million for a new bridge on 24th Street East in Sumner to improve traffic flow and relieve congestion on Stewart Road.
The only hesitation among council members Monday night centered on how to use the excess proceeds from a finalized sale.
Nancy Dumas, a candidate for mayor, said the council should engage in a robust discussion with the public. After paying off the golf course debt, everything left "is essentially your money," she told the audience.
Councilman Randy Hynek, the sole dissenting vote, said the city could have kept paying back the debt gradually and held on to what he called a long-term property investment that will never come around again. He suggested selling fewer acres would have been a better approach.
The city originally owned nearly 300 acres on the site and after the sale will have less than half that acreage.
“I just think it’s short-term thinking,” Hynek said. “We’re going to get all this money and before we know it, it will all be gone.”
But the majority of the council praised the decision. Nobody from the public commented.
Councilman Steve Allsop said Sumner faces an unprecedented responsibility to put the proceeds of the sale to good use.
“This is a very exciting beginning,” he said. “The possibilities are across the board. We will need to be careful and thoughtful.”
The city built Sumner Meadows 18 years ago. Of the original 292 acres the city purchased in 1993, it will retain 138, Galle said. That land is zoned for agriculture and will remain open space, he said.
Officials from Colliers International, the Seattle-based firm that marketed the property and narrowed the field of bidders to about 30, say the planned development will create jobs for residents. An Amazon distribution center that has been running for about two years created about 500 jobs, and a similar facility on the golf course property could add more, said Colliers Senior Vice President Matt McGregor.
Despite Monday’s approval, legal challenges could complicate finalizing the agreement.
City Attorney Brett Vinson said that complaints typically arise with the sale of any large piece of property, and officials are prepared.
Investco, a local development company, filed two complaints last spring asserting the city’s resolution that authorized selling the property was inconsistent with the city comprehensive plan. Investco also claims that selling the property will cause noise, traffic and loss of aesthetics for an Investco-backed apartment complex planned on land adjacent to the golf course.
One complaint, filed with the state Growth Management Hearings Board, was dismissed in July and Investco is appealing. Another complaint is pending in Pierce County Superior Court.
“These lawsuits are the biggest obstacle in closing the deal,” Vinson said Monday.
Kari Plog: 253-597-8682 email@example.com @KariPlog