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The Bartlesville Development Authority approved an agreement to sell property to ABB Inc. for $17-million during a special called meeting on Friday.

David Wood, the BDA’s President, said the property is located at 7051 Industrial Blvd. He said that the agreement includes a 10-year option for ABB to acquire up to 16 acres of adjacent property for potential future expansion at zero cost, at a development ratio of 7,500 square feet of new interior space per acre.

ABB continues to be a highly-valued contributor to our local economy, and this commitment to own rather than rent their facility proves to Wood that ABB has a long-term commitment to Bartlesville. He said ABB's interest in the adjacent property further supports the potential for future growth in the city.

As for the BDA, it would like be 2032 before they would receive through rent the cash they will net today from the sale. Wood said the BDA supports ABB with their growth in Bartlesville – and use the sale proceeds to pursue more primary-industry employment. He said it is “a textbook win-win.”

The $17-million sale price is not based on the initial cost - or the replacement cost - of the facility. From an investor's perspective, the price is a function of the anticipated income to be derived from leasing. Wood said the BDA's lease with ABB provides for a heavily-discounted lease rate once the building is paid-off in 2025. He said 100-percent of the rent payments are going to retire the debt, so the BDA has not – and will not – receive any cash benefit for another five years.

In 2026, ABB has five, five-year renewal options of greatly reduced rent. Wood said it is this revenue-stream that imputes the value of this asset – and will not receive any cash benefit for another five years. He said ABB has been more than fair with their $17-million offer.

Wood said if ABB does not exercise their option to receive the property at no cost that comes with the requirement that they build an additional 7,500 square feet for every acre they receive, the property will not leave the possession of the BDA.