96 South Main Street, PO Box 77, Nephi, Utah 84648 - Voice: 435 623-0525 - FAX: 435 623-4735
On our front page this week
June 9, 2021
By Myrna Trauntvein
Council members planned to create an industrial park in south Nephi but have now agreed the sale of the property to a single industrial developer for construction of a refrigeration plant.
“For the past several months, the city staff has been working with Jenson Companies (JRC Investments, LLC) to finalize the sale of land in an area designated for an industrial park,” said Seth Atkinson, city administrator.
He said that the mayor had previously signed a real estate purchase contract with the approval of the city council. The real property where the development is located is property the developer purchased from the city.
“The city purchased 70 acres and of those 52 are usable acres,” said Atkinson.
That was done in February contingent upon a development agreement being accepted by both parties.
“After a thorough round of negotiations, a final draft of the development agreement is attached for review by the city council,” said Atkinson.
Two motions were needed to approve the transactions.
Nathan Memmott, council member, made the motion to approve the Addendum #2 and Justin Seely, council member, made the second. All present voted in favor.
Kent Jones, council member, made the motion to accept the development agreement and Larry Ostler, council member, made the second. All voted in favor.
Both motions authorized Glade Nielsen, mayor, to sign the documents.
“The development agreement sets forth the conditions of development on the city’s parcel designated as an industrial park,” said Atkinson.
These conditions include that: the development must conform to the Industrial (ID) zone of the city; the developer is required to install all infrastructure associated with the development; a reimbursement agreement could be created for any upsizing in utilities; and impact fees are required.
“The city has an option of a buyback if there is not a facility constructed, and a certificate of occupancy issued, within five years,” said Atkinson.
“At another spot, I have used six years,” said Kasey Wright, city attorney. “I didn’t want it so that if they defaulted and the city buyback time had expired the city would lose that opportunity.”
“The city’s purchase option shall expire upon the earlier of: a) the issuance of a certificate of occupancy for a refrigeration plant; or b) six years from the date developer received the subject property from the city,” affirms the wording.
A first right of refusal is given to the city if the property is sold or transferred to an entity other than a subsidiary company, family member, or family trust, and; Reimbursement agreements will be recorded with the Juab County Recorder’s Office.
Ken Jenson has already signed the agreement on behalf of JRC Investments, LLC).
“The staff recommends signing the development agreement with Jenson Companies and completing the sale of land in the south industrial park area,” said Atkinson. “We recommend that you authorize the mayor to sign the development agreement.”
In order to assist Jenson Companies with closing, he said, an additional extension of time was needed. For that reason, Addendum #2 was attached which extended the original Real Estate Purchase Contract another 45 days.
Council members reviewed the development agreement for the Kenneth Jenson Subdivision which ensures that there are sufficient public utilities and roads to properly serve the development and to also ensure that the development use is consistent with the agreement.
The agreement also states that the city desires the development be completed and operated in compliance with the requirements of the industrial (ID) zone and all applicable city code provisions, including code provisions relating to nuisances and offensive businesses and facilities and is in conformity with the Land Use, Development and Management Act, the Nephi City General Plan and the Nephi City Code.
The developer plans to construct and operate a refrigeration plant on the property but the developer may also construct and operate other businesses there.
“We have been discussing this for some time,” said Jones. “I am comfortable with it.”
If a refrigeration plant is not constructed and occupied by a properly issued certificate of occupancy on the property within five years of the developer receiving the property from city, then city will have the option to purchase the property for the original purchase price of $350,000 plus an inflationary increase up to 6 percent per year plus the verifiable costs of improvements that were actually made by the developer.
The inflationary increase will be based on the Ivory-Boyer Construction Report of the Industrial/Warehouse/Manufacturing category published by the Kem C. Gardner Institute at the University of Utah.
“He said he was working on a 1041 tax form,” said Ostler.
If the city exercises its purchase option, then the developer will convey the property back to the city free and clear of all encumbrances and liens.
“The developer plans to increase the size of the refrigeration plant as demand allows and to possibly add other buildings, structures, and businesses to the property in additional phases of the development,” said Atkinson. “He will begin with a 6,000 square foot building but could build a 300,000 square foot structure eventually.”
The first right of refusal does not apply if the developer transfers the property to a subsidiary company owned by developer or to developer’s members, or to the family members or family trust of such members.