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Developer, School District Ink 15-Acre Deal

VALLEJO, CA-The school district will get $10 million for the land, including $4 million up front, and a piece of the back-end profit as part of the re-entitlement play.

By Brian K. Miller | Updated on May 04, 2008

VALLEJO, CA-The Vallejo Unified School District is selling four surplus infill parcels totaling 14.7 acres in a deal that includes a piece of the buyer’s back-end profit. As part of the deal, the school district is carrying back $6 million of the $10 million purchase price in the form of a trust deed. EnviroFinance Group, formerly Continental Environmental Redevelopment Financial, provided $7.25 million in financing for the acquisition and repositioning of the properties.

The buyer is Brooks Street, a land development specialist that plans to add value to the site by re-entitling them for as much as 180 units housing units and some street-level retail space. Brooks Street specializes in master planning, brownfield remediation, urban infill, adaptive reuse and sustainable development. This time last year the company acquired with Cherokee Investment Partners the 38-acre former General Mills processing plant on the waterfront in Vallejo. It also is assisting in the management of an 87-acre brownfield site in Richmond, CA, known as the Campus Bay property.

James Schuppert, a VP with the lender, a specialist in brownfield lending, tells GlobeSt.com that two of the properties are clean and two have underground contamination resulting from storage tanks once containing petroleum. The two-year loan represents 65% of the cost to acquire, clean and re-entitle the properties, which puts the overall price tag at between $10 million and $11 million. Once the clean-up and re-entitlement are complete, Schuppert says the loan-to-value will be between 35% and 40%, which means the re-entitled property would be worth as much as $20 million.

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