Agenda item:
USF Finance and Audit Advisory Council Workgroup
November 7, 2013
Issue:
Plan for acquisition of building and parcel of land known as Gulfcoast
Legal Services
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Proposed action: Informational Item
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Executive Summary:
The USFSP Strategic Plan, Points of Focus: 2009-2013 includes as one of six goals
to “enhance revenue, provide effective and efficient financial management, and
ensure institutional sustainability”. Further, a specific objective of the plan directs the
institution to “evaluate and improve facilities and processes that foster services to
faculty, students, staff, and the community”. In alignment with this goal and objective
USFSP plans to purchase a property located immediately adjacent to the campus.
In the October 2011 update of the USFSP 2010 Campus Master Plan (as approved
by the USF Board of Trustees on December 8, 2011), it is noted that in the original
2000-2004 Plan projected a need for 15,000 gsf support services building that has to
date neither been purchased or constructed. Further, the Plan recommends
preparation for future growth needs by the purchase of “Adjoining Property
Acquisition” of 10,000 gsf, which refers to the Gulfcoast Legal Services building and
property.
Additionally, the USF System Five Year Capital Improvement Plan (CIP 2) and
Legislative Budget Request approved by the USF System Board of Trustees on
June 14, 2012, lists this project as Priority #12, STP Adjoining Property Acquisition
and Remodel, for $1,000,000.
The University of South Florida has the opportunity to purchase the building, known
as Gulfcoast Legal Services, and parcel of land consisting of approximately .31
acres with the commonly known address of 641 First Street South, St. Petersburg,
Florida 33701, adjacent to the current campus boundary. The building has 10,000
Net sq. ft. of space and a total footprint of 13,360 Gross sq. ft. The property also
includes 17 parking spaces which are adjacent to and accessible through Davis East
Gold Parking Lot #5.
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Via correspondence dated May 24, 2012, USFSP made an offer to purchase the
Gulfcoast Legal Services Parcel for $850,000 contingent upon the finalization of
legal agreements. This purchase was approved by the USFSP Campus Board on
September 19, 2012 but never executed by either party pending due diligence. At
this time, all due diligence requirements have been completed.
Based on the due diligence findings another appraisal was performed and the
purchase offer was reduced to $775,000, contingent upon the finalization of legal
agreements, and submitted to the Executive Director of Gulfcoast Legal Services on
September 27, 2013. The expected response time is after the Gulfcoast Legal
Services Board of Trustees meeting on October 24, 2013.
This property will be used to provide much needed academic support space for the
USFSP campus. While teaching, learning, and student life space has been
expanded and upgraded during the last several years with the construction of the
STG academic facility and the University Student Center and the renovation of the
Student Life Center, academic support functions continue to languish in the ageing
less than adequate temporary modular structures of the Terrace. Acquiring the
Gulfcoast Legal Services property and structure will allow the campus to consolidate
spaces for academic support in a facility located within the boundaries of the
campus.
Financial Impact:
The first Summary Appraisal of the Gulfcoast Legal Services property received on
April 2, 2012 used the Sales Comparison Approach and the Income Approach and
arrived at a reconciled appraisal value of $740,000 with the Assemblage Premium at
$385,000 for a sum total of $1,125,000. On June 28, 2013 we received the second
Summary Appraisal – with consideration of the findings of Due Diligence – which
listed the Market Value “As Is” at $675,000 with an Assemblage Value “As Is” of
$515,000 for a sum total of $1,190,000. Although the Market Value went down
$65,000 due to the findings of due diligence, the Assemblage Value increased
$130,000. The increase in the Assemblage Value is due in large part to the increase
in land value in the St. Petersburg area.
With the projected increases in property value in the St. Petersburg area, the
window to purchase the Gulfcoast Legal Services property and still remain under the
$1,000,000 for acquisition and remodel, that was approved by the USF System
Board of Trustees on June 14, 2012, will soon close.
Also, based on the current growth of student enrollments and faculty, and the
prolonged need for academic support space, USFSP will soon be required to lease
space off campus to house and provide academic support functions to the students,
faculty and campus community. USFSP has leased space in the past and found this
approach to be far too expensive to be sustainable over time and, because of the
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separation distance from the campus core, an inconvenience and hardship imposed
on the students, faculty and staff.
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Strategic Goal(s) Item Supports: USFSP Strategic Plan 2008-2013, Goal 6.
Enhance revenue, provide effective and efficient financial management, and ensure institutional
sustainability
Supporting Documentation Online (please circle): Yes (No) - Map, BOT Five-Year
Capital Improvement Plan (2013-14/2017-18), Current and Potential Costs, Summary
of Events (Due Diligence), Agreement for Sale and Purchase
Prepared by: John Dickson, Director of Facilities Services, USFSP
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