The developer of two projects on the city’s outskirts will be buying out a major stake in the local company that owns a key piece of the development industry in a deal worth $2.2 million, two people familiar with the matter said.
The acquisition by City Development Group of its stake in City Services would give the company a bigger stake in development of the industrial area, which is a key player in the city, according to the people, who asked not to be identified because the transaction is private.
The two companies have had close business ties.
City Services owns and operates a building on the industrial side of the site, and the company was planning to acquire the property to create a new office and retail complex there, according the people.
City Development Group, a company based in Singapore, bought the land from an owner who had been selling it to City Services for a decade, said one of the people who has direct knowledge of the deal.
The owner had been part of the company that purchased the land, and City Services had sold it to another company, the person said.
The owners did not respond to a request for comment.
City Security also has a significant stake in a commercial building that is being developed in the area.
The company, which operates a fleet of vehicles and a taxi fleet, owns a parking lot on the site that is part of an expanded parking lot that includes a new development that is planned for the site.
The company owns a property in the industrial part of City Services’ commercial development, but it has been leasing that property to City Development since last year, the people said.
City Security did not immediately respond to requests for comment from CNNMoney.
City Council President Steve Fass said he has been working on the deal with the city since the last mayoral election and that the two parties were “working out a plan that will benefit both sides.”
The city council has not voted on the acquisition yet, but Fass has been talking to city staff and City Development about it, he said.
Fass, who has previously said the deal could be done in months, said the council had been informed of the transaction during the meeting last month.
The council will consider approving the deal when it meets again on Monday.
Facing pressure from some business groups, Fass and city council members last month announced a new deal to give the city more flexibility to manage development on a city-owned site, a proposal that drew criticism from some businesses.
The mayor also has been pushing for the city to get more out of the area, including more public access to the site and more development incentives, the sources said.
City officials have also been working with private developers on projects there, one of whom is an investor in City Security.
Fass, for instance, has been trying to persuade the developers to include more development in the site while also working with city officials to help ensure the city can use its economic development authority to make changes to encourage developers to expand the area and get more people into the city.