MONTPELIER, VERMONT PROPERTY

9 Months Ended

Sep. 30, 2020

Montpelier Vermont Property [Abstract]

5.	MONTPELIER, VERMONT PROPERTY

The Company’s property located in Montpelier, Vermont has completed the required environmental remediation as disclosed in our 2019 Form 10-K. Groundwater monitoring is ongoing and expected to be completed in the first quarter of 2021. The owners agreed with a local developer on a fixed fee of $500,000 to remediate the property, of which a balance of $125,000 is owed and payable upon the property receiving a Certificate of Completion (COC) from the State of Vermont Agency of Natural Resources (“ANR”). The COC provides certain liability protections for environmental contamination at the property under Vermont’s Brownsfields Reuse and Environmental Liability Limitation Act program (“BRELLA”).

In August 2020, the existing owners of the property amended and restated the previously reported Pre-Development Agreement. The Amended and Restated Pre-Development Agreement calls for the transfer of 50% of our interest in the property to the local developer which remediated the property and 10% to an unrelated real

estate

consultant which has assisted us in the process of remediating and developing the property. The transfer of ownership will occur upon receipt of the COC and will result in the Company owning approximately 28% of the project thereafter. Also, in August 2020, we entered into a lease agreement with an unrelated party which covers approximately 3.5 acres of land and existing improvements together with an expansion building of approximately 8,000 square feet. The remainder of the property (approximately

2.5 acres

) is subject to development limitations related to wetlands, the location of the Winooski River and institutional controls that have been or will be implemented to address contamination related to historical site operations. The estimated costs of renovation and construction is $2.5 million. Total construction costs incurred as of November 6, 2020 are approximately $1.36 million (or 54% completed), of which the Company’s 28% is approximately $381,000 to be recorded and paid in the fourth quarter of 2020. The term of the lease will commence on the earlier of: (a) 30 days after the date the project is substantially completed (as defined); or (b) the date that the tenant opens for business (the “Commencement Date”) and shall continue until the 10

anniversary of the Commencement Date. The lease provides the tenant the option to renew or extend the lease for two consecutive renewal terms of five years each. Average annual rent over the ten-year initial term is approximately $229,000. Under the terms of the lease the tenant is responsible for real estate taxes, insurance, and maintenance (except for capital repairs and replacements, as defined).