The City of Sumner can finalize the sale of Sumner Meadows Golf Links after settling several lawsuits with a local developer who challenged the $53 million deal.
Six Kilns LLC — which is backed by local developer Investco — originally planned to build apartments on property adjacent to the city-owned golf course. The lawsuits, filed in April 2013, challenged the city’s actions on several fronts, including the process surplussing the property and environmental concerns.
Now, Investco has changed its plans from residential to industrial, after the City Council approved a zoning change proposed by the developer to allow a warehouse to be built on the property.
The golf course will be developed for industrial use by Principal Financial Group, an Iowa-based global investment firm that plans to buy the links in two phases.
City Attorney Brett Vinson said warehouse construction on the first phase should begin next year, after the sale closes at the beginning of 2015.
“I think this allows (Six Kilns) to develop (the) property in a favorable manner,” Vinson said of the settlement agreement. “It removes a hurdle that must be removed before the city can actually close on the sale of the golf course.”
Ashleigh Kilcup, a spokeswoman representing Six Kilns, said the settlement is a positive step for all parties, especially the partnership on road improvements.
“We really do feel like it’s a win-win for the community and our investors,” Kilcup said. “We’re happy that we’re able to proceed with more clarity.”
Vinson said Principal wouldn’t move forward with a purchase and sale agreement until the lawsuits were settled. Proceedings were on hold while negotiations occurred off and on over the past 18 months.
Those negotiations were “intense and diligent” over the past six months, Vinson said.
The settlement agreement states that Six Kilns will dismiss all legal challenges against the city.
It also states that Six Kilns and Greenwater North LLC, another affiliated company backed by Investco with plans to develop nearby land, will play an active role in completing important roadway projects, including replacing the Stewart Road bridge.
Part of the agreement also states that Six Kilns, Greenwater North and “any other successor entity” won’t oppose and or file “any future appeals relating to development of the Golf Course,” provided that the development meets criteria outlined in the agreement.
The city built the golf course 18 years ago. The 154-acre parcel was part of a larger land acquisition by the city in 1993. Of the original 292 acres bought, Sumner will retain 138 for various city uses.
Finalizing the golf-course sale has been several years in the making.
In 2012, city officials determined they couldn’t continue subsidizing the golf course without raising taxes or utility rates. The city’s utility fund paid for the land while the general fund paid to build the golf course, City Administrator John Galle told The News Tribune last year.
Galle said early miscalculations related to golf course revenue led to more borrowing and refinancing, increasing the burden on the city. Selling the property is an effort to address that burden and its effects on the utility.
Officials have long said the sale eventually would lower residents’ utility rates and help repay debt, including about $5.8 million still owed on the golf course property.
The sale also will provide Sumner’s share of funds — $5 million — for the new YMCA, which is under construction and set to open in 2015.
Moving forward, residents will see lots of industrial development in the area, and the settlement agreement offers hints about potential development of the golf course property.
Initial work will be limited to the northern 65 acres of the golf course, the documents state.
That first phase “may be developed” with warehouse buildings up to a maximum of 1,400,000 square feet, according to the agreement, and the second phase can be developed up to 1,300,000 square feet.
As for the adjacent property, Vinson said, a permit application for a roughly 300,000-square-foot warehouse has been submitted to the city. The warehouse development that will occur is “consistent with the area out there,” he said.