Research from the Center for Community Progress has highlighted that vacant and abandoned properties impose significant burden and revenue challenges on the local tax base. The longer these properties remain unoccupied, the greater the investment required to restore them for commercial use.
The Development Group has inspired economic growth to create a strong community of integrity where people want to be by purchasing vacant buildings, restoring them for a higher/better use, and marketing them to new or expanding businesses. Traditionally, lease-purchase agreements have been utilized to protect economic development investments.
A lease purchase agreement outlines a structured path towards ownership of a property, with clear terms tied to economic development goals while capturing the total investment of the Hardee County Industrial Development Authority (IDA). For example, based on IDA’s Gross Investment of $1,000,000, an annual lease payment of 7%, in this case, $70,000 is established. The lease payments, after subtracting taxes and insurance, can be applied to the purchase of the building based on a sliding scale of job creation. The scale is commensurate with the investment. An example would be a company creating and maintaining 12 jobs may apply 50% of lease payments, less taxes and insurance, to the purchase of a building.
The Development Group manages and markets IDA projects. In 2015 the IDA purchased 1340 N US Hwy 17 for $750,000 and recruited HardeeFresh, The US’s only certified organic vertical farm in an effort to keep a large commercial property from sitting vacant in the crucial Highway 17 corridor. The IDA invested less than $1.1 million in additional funds to renovate the building.
HardeeFresh and the IDA executed a lease-purchase agreement on July 10, 2017. The following year, HardeeFresh purchased the property from the IDA for $1.2 million. To incentivize job creation, the IDA held an additional $500,000 mortgage on the property. The mortgage included performance covenants. Each year that HardeeFresh creates and maintains twelve full-time equivalent positions, the mortgage was reduced by an amount equal to $25,000. In addition, the mortgage was reduced by an amount equal to $2,100 for each full-time equivalent position created by HardeeFresh in excess of the twelve full-time equivalent positions. As of April 2023, the Performance Based Mortgage has amortized $356,200 of the $500,000. 2024 amortization is to be determined.
On July 16, 2024 Farm Credit filed foreclosure on the HardeeFresh property naming the IDA, due to the real estate performance-based mortgage. The IDA acknowledged in the 2018 mortgage that it is “junior, inferior, subject and subordinate at all times to (i) the mortgage in favor of Farm Credit of Central Florida…”
Transparency and efficiency have been a priority for The Development Group CEO Denise Grimsley, who assumed leadership of the organization two years ago. On May 22 the IDA was notified of a construction lien that was filed on 533 Carlton Street, Wauchula. The IDA owns the property and leases the premises to WauchulaFresh, a subsidiary of HardeeFresh. The attempted lien is a breach of the lease agreement.
“As stewards of these properties, we are working with our legal team to protect our assests in an expeditious manner,” explained The Development Group CEO Denise Grimsley.
In response to the lien, IDA attorneys provided formal notice of default to WauchulaFresh quoting Sections 19 and 29 of the lease, “tenant has no power to incur any indebtedness giving a right to a lien of any kind or character upon the property.
HardeeFresh has been a valuable member of the community and has created substantial economic output. The Development Group will reassess a better and higher use for the complex located at 533 Carlton Street, Wauchula and remains committed to marketing available commercial space to inspire economic growth.