Amazon Looking at Roanoke City Site

CITY COUNCIL AGENDA REPORT
To: Honorable Mayor and Members of City Council

Meeting: December 4, 2023
Subject: Approval of Amendment to the Deed between Deschutes Brewery and the
City and an Escrow Agreement for Repayment of Grant funds for 2002 Blue
Hills Drive, N. E., at the Roanoke Centre for Industry and Technology.
Background:
In March 2016, Deschutes Brewery, Inc. (Deschutes or Seller) announced that it would
construct an $85 million brewing facility at 2002 Blue Hills Drive, NE (Tax Map No. 7230101)
(site). The 49-acre site is located in the Roanoke Centre for Industry and Technology (RCIT),
which is owned by the City of Roanoke (City).
In order to facilitate development of the site, the City entered into an agreement with the
United States Economic Development Administration (US EDA) for EDA Project No. 01-01-
14746 for construction of an approximately 3,375 linear foot extension to Blue Hills Drive, NE
(road extension). The total project investment amounted to $3,028,560, the Federal share of
which was $1,514,280 and was intended to provide a direct road connection and utility access
to the Site, as well as to an ancillary site owned by Roanoke Natural Foods. Construction
elements included the roadway, water, sewer, lighting, sidewalks, landscaping, and
appurtenances. The project was substantially completed in December 2019 and approved by
the US EDA in early 2020.
Deschutes (as Blue Hills Drive, LLC) purchased the Site from the City in June 2018. After
several development delays caused by a substantial downturn in the craft brewing industry
and exacerbated by the Covid-19 Pandemic, Deschutes has been unable to develop the
proposed brewing facility on the site. During the first quarter of 2023, Deschutes entered into
negotiations to sell the site to Amazon.com Services, LLC (Purchaser), a Fortune 50 e-
commerce company, which intends to construct an approximately 125,000 square foot
fulfillment center. The addition of this company will be consistent with services offered by other
tenants within RCIT and will serve as an excellent addition to our local economy.
In order to facilitate the sale of the site, the City, Seller, and Purchaser are seeking approval of
the following:
1. Amendment of Deed for the Site
Purchaser has requested the Deed be amended to: (1) remove references to the First
Amended and Restated Contract for Purchase and Sale of Real Property between the City
and Seller (Contract), which will have no force or effect upon transfer of the site; (2) delete
provisions restricting use of the site for the purposes of a manufacturing facility; and (3)
memorialize the obligation of Purchaser to contribute to the repayment of funds provided by
the Commonwealth of Virginia to the City for construction of the Blue Hills Drive (Blue Hills
Drive extension) should Purchaser fail to meet the investment obligations required by the
grant.
2. Grant Repayment Escrow Agreement
The City, Seller and Purchaser desire for the EDA Grant amount of $1,514,280 to be repaid in
order to allow for certain covenants, obligations and restrictions set forth in the Contract to be
eliminated as further set forth in the Deed Amendment referenced in Section A. To this end,
the parties are seeking approval of a Grant Repayment Escrow Agreement that will allow
proceeds from the sale in the amount above to be disbursed to the City at closing for the sole
purpose of repaying the EDA Grant.
Considerations:
At present, the use proposed by the Purchaser violates a deed restriction put in place by the
US EDA for the grant the City received to build the road, which limits use of the site to the
manufacturing sector. In order to facilitate both the sale of the site and the newly proposed
use, the City intends to repay the Federal share to the US EDA in exchange for release of this
restriction associated with the EDA grant funding.
Recommended Action:
Approve the proposed Amendment to the Deed and the Grant Repayment Escrow Agreement
as set forth in the attachment to this report and determine that the Purchaser’s entrance into
the market will serve as an excellent addition to our local economy. Authorize the City
Manager or his designee to execute such deed amendment and escrow agreement among the
City, Blue Hills Drive, LLC, and Amazon.com Services, LLC, substantially similar to the one
attached to this report, and to execute such other documents and to take such further actions
as may be necessary to implement, administer, and enforce such Amendment and Grant
Repayment Escrow Agreement, with the form of such Agreement to be approved by the City
Attorney.
Bob Cowell, City Manager
Distribution:
Council Appointed Officers
Angie O’Brien, Assistant City Manager
Laura M. Carini, Senior Assistant City Attorney
Marc B. Nelson, Director of Economic Development
Amelia C. Merchant, Deputy Director of Finance

Amazon Looking at Roanoke City Site

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CITY COUNCIL AGENDA REPORT

To: Honorable Mayor and Members of City Council

1. Amendment of Deed for the Site

2. Grant Repayment Escrow Agreement

Bob Cowell, City Manager

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