The City received eight competitive offers in January to purchase the 1037 Boston Post Road property through its broker CBRE.
By Tom McDermott
The City received eight competitive offers in January to purchase the 1037 Boston Post Road property through its broker CBRE. At the February 27 City Council meeting, discussion ensued on a draft Purchase and Sale Agreement with Bill Wolf Petroleum Corporation, which has made a $5.6 million offer. The Agreement calls for the buyer to pay $250,000 at execution and an additional $250,000 deposit at the end of due diligence. As part of the proposed sale, the city would owe CBRE a 4 percent or $224,000 fee.
Rye paid $6.2 million when it bought the property in 2006, at a time when it was considering a plan to transform it into a police/court facility. That plan was scuttled due to the $25 million cost and a crumbling economy.
One of the issues facing the City and its tenant Lester’s has been a parking easement to allow for customer parking and perhaps ten spaces for weekday use. A “Note” to Article VI of the Agreement states: “Parking needs to be discussed. Purchaser is willing to discuss alternatives that meet the needs of both the city and the ten- ant.” According to Corporation Counsel, Kristen Wilson, the buyer is willing “to sign a license agreement for ten spaces.”
Lester’s lease has been extended to the end of 2013, and they would continue as a tenant under the proposed Agreement.
On behalf of Lester’s, Perry Schorr addressed the Council and made an impassioned attempt to convince them to sell the building to his company. “We said in our most recent bid that we would beat any offer by $50,000,” said Shaw. “And with our deal, you will save one percent on the broker’s fee, another $60,000,” he added. Last fall, Lester’s made a $3.6 million offer to buy the building.
Councilmember Laura Brett told Schorr that the Council felt some bids were very close, but that, in the end, “certainty of closing” with Bill Wolf Petroleum made the difference, since it would be an all-cash deal.
Schorr countered that the buyer paying cash upfront would soon re-finance anyway, possibly making any environmental reviews an issue for the lender at some point. He also pointed to Lester’s intention to not only allow for ten weekday morning spaces for library and City Hall employees, but also continue to “turn their heads” at the many Rye residents using their parking, but not shopping in his store.
Mack Cunningham asked the Council if they knew of the buyer’s intended end use for the building or possible impact on traffic. Neither the Council nor its broker’s representative knew the buyer’s plans for the B1 zoned property. Councilmember Richard Filippi indicated he thought CBRE had implied “high-end retailing” as the buyer’s intended use at some point.
The favored buyer, a real estate holding and gasoline distribution company from Jericho, Long Island, operates several Shell-brand service stations.
An article in the New York Times in 2009 indicated that CBRE had helped 7-Eleven find new store-sites, including several in the Bronx, where one 7-Eleven operated in a building owned by Bill Wolf Petroleum.
The City’s 1037 saga would appear to have a somewhat happy ending with the appearance of a buyer with cash in hand. But, several interesting questions also linger, not the least of which being: What will Bill Wolf Petroleum use it for and how will that impact Rye, which is already facing some serious land use issues.