Wellington yanks letter of intent from State Farm property
A purchase agreement for the State Farm Insurance Co. building is now in a holding pattern after Wellington Management, Inc. decided to pull a letter of intent to buy the building.
Steve Wellington, president of the development company, said he is still very much interested, "but we're not sure exactly what the next step is."
The process began in September when Wellington signed a purchase agreement with State Farm requiring the company to put a nonrefundable amount of earnest money down in an escrow account. The money would be held until the beginning of April until a final agreement was signed.
Wellington said since his company didn't close on the building by the deadline, he decided to step back and ask for an extension, to avoid losing the down payment.
"We were moving toward closing and proceeding but had a couple of setbacks so we decided to terminate the agreement and continue to negotiate with State Farm," he said Thursday. "So right now they could make a deal with anybody in town - that's not our hope or desire - but it's kind of the product of a long, challenging effort on our part to put the project together in a way that made sense."
Additionally, the plan to build a Costco on the site wasn't well received by Woodbury city staff, he said, and Wellington wasn't able to get enough tenants for at least half of the space by the deadline.
"We were making progress on all fronts but we weren't quite there in terms of having confidence," he added.
But city officials say since no formal proposal was ever submitted, the city so far hasn't given an opinion one way or the other.
"The city really has no comment at this point because we've seen many renditions of this plan but we don't know what he's going to submit," Community Development Director Dwight Picha said.
Council member Paul Rebholz said the current site is not zoned for retail, but the council is keeping an open mind. A zoning change at the property would be an extensive process, city officials have said.
"We're open to finding ways that the State Farm facility can be used in a new way that's consistent with the current zoning," he said. "It's a priority for the council and we hope to continue that conversation with Wellington."
Wellington said a company that would bring in about 500 jobs and use 80,000 square feet of the total 400,000 is interested in signing on, but that's still not enough to move forward.
"That's only 25 percent of the building and we wouldn't proceed until we get about 50 percent of the building committed," he added. "So we needed more time to get some more tenants for the building."
The developer said the holding pattern will continue during negotiations, though Wellington no longer has a contractual right to the building.
Wellington Management owns 16 other buildings in Woodbury located at City Centre, City Centre East, the Valley Creek mall and others.
"This site (State Farm) in particular to me is the most important, undeveloped in the city, and it seems like an interesting challenge and something we would enjoy developing given our history working in the community," Wellington said.