In the original Real Estate Purchase Agreement, the Grassdale sales price is $5 million. A FOIA response indicates that there was no assessment performed to arrive at this price.
The Settlement Statement does not reference the $5 million. Instead, the gross amount due to FDRPC is $3.6 million based on an agreement for FDRPC to pay $1.4 million in infrastructure improvements. FDRPC will only gain $3.6 million from this sale.
FDRPC is also paying a sales commission of $150,000 and receiving a $1.4 million down payment. The sales agreement between FDRPC and Sun Fort DuPont RV LLC also includes a loan of $2.1 million referred to in the Agreement as the Purchase Money Promissory Note.
The terms of this loan are extremely generous. The note has no interest and no payments are required for four years due as a balloon payment on the end date—presumably 10/29/2025.
FDRPC did no due diligence on Todd Burgage’s finances to determine whether he had the resources to pay this loan. This lack of due diligence was the primary factor for the rejection of the contract by the FDRPC Board.
Of course, the same lack of due diligence applies to Sun Fort DuPont RV LLC which was belatedly assigned as the Purchaser. This anonymous LLC was only created 18 months after the original Purchase Agreement was sighed.
A June 2022 WDEL article reported that the open date for the campground had been pushed to 2024 with no explanation provided. It’s possible that whoever owns Sun Fort DuPont RV LLC was planning on collection of campground revenues to pay this note. If so, the delay could put payment at risk.
The new FDRPC leadership team should do additional due diligence to determine the likelihood of receiving the loan payment in the fall of 2025. Fortunately, the terms of the Purchase Money Mortgage include a provision 8(b) below which creates an opening for this initiative.
FDRPC could reach a determination that delaying the project until 2024 will impact revenues adversely threatening repayment of the mortgage loan. Sun Fort DuPont RV LLC would then have the opportunity to assure FDRPC that it will have the resources to pay the loan.