Nearly six years in the making, the sale of the 12.68 acre Kelly Moore Paints San Carlos Headquarters was a process that our team was proud to create and run for the Kelly Moore executive team and Board of Directors. For nearly a decade, Kelly Moore had been receiving unsolicited offers from potential buyers for its San Carlos HQ site. Kelly Moore’s CEO reached out to our team periodically to see what our take on the market was. After some discussions, Kelly Moore invited us to speak to the management team to help them formulate a strategy to address these inquiries and to set the stage for an eventual sale.
Early on it was clear that discretion would be the guide star for the sale of the properties. The board of directors and family member ownership as well as employee ownership were acknowledged factors as well as on-going retail operations at the site in order to bring this disposition to a successful conclusion. In addition, due to the number of factors and parties involved, obtaining the highest price was not the only factor relevant to the group.
Creating a process that respected the stakeholders and business operations was essential. We knew that the City would be reticent to have more tech office development with the associated traffic and density impacts such a project would have. Based on our discussions with the City, we curated a small list of potential buyers that specialized in life science development.
Knowledge of the City of San Carlos is a critical strength of our team. Specifically, Steve Divney is a 25-year resident of San Carlos with past experience as a Chair and member of the San Carlos Planning Commission. Additionally, Steve serves on a number of high-profile non-profit boards based in San Carlos: the San Carlos Parks and Recreation Foundation (past President and current member), the San Carlos Chamber of Commerce (past President and current member), and the San Carlos Development Corporation (the entity that owns the San Carlos Elms –current President). These deep community ties combined with knowledge of the zoning code and City personnel (from City Manager, City Council members (past and present), current Planning Commission members, and City staff from top to bottom), ensured a foundation of knowledge and experience for both the Kelly Moore offering as well as for the potential buyers.
Our team pointed out the importance of the rail spur that ran through the middle of the Kelly Moore campus. It was not owned by Kelly Moore at that time. It would be a problem for a future development if not owned by Kelly Moore or the buyer. We identified the rail’s ownership, and negotiated the sale of the spur to Kelly Moore prior to entering into a contract with a buyer for the full campus. This not only averted a diminution in sale price, but also created a tidy gain based on the purchase price of the rail and the eventual sale price of the campus.