Sherman recently rejected bids by QuikTrip Corp. and Douglass Distributing to purchase a 22-acre tract of land on the southeast corner of the intersection of U.S. Highway 75 and FM 1417.

At city staff’s request, the Sherman City Council rejected the two bids received for the 22.309 acres of city-owned surplus property on Sherman’s south side.

“One did not meet our minimum and the other was marked up quite a bit,” Director of Finance Mary Lawrence said of the inspection conditions included with QuikTrip’s bid. “We believe one bid does not represent the market, so we’d like to reject both bids and rebid it at some time (in the future), maybe approach it a little bit differently to see if we can get some more bids.”

Douglass Distributing’s bid of $2.5 million was under the city’s $3.8 million minimum for the property, while QuikTrip’s bid was for $4,046,022 with inspection conditions that would have to be met. Earlier this year, QuikTrip received approval for a 5,858-square-foot gas station near the southwest section of the FM 691 and Hwy. 75 intersection on Sherman’s north side. Douglass Distributing operates the Lone Star Food Store chain of convenience stores.

In August 2015, Sherman announced plans to offer the 22-acre tract for sale for commercial development. The city plans to move the Blalock Park Fire Station and combine the nine acres of property it is on with 13 acres of adjacent land that was purchased by the Sherman Economic Development Corp. from Garcha Corp. of Plano for $575,000.

City Manager Robby Hefton said the city is going to work with an engineer and architect to create a preliminary design for the 22-acre tract of land before it is put back out for bids in a few months.

“That’s probably not going to take more than six or eight weeks,” Hefton said. “So we expect that we would be able to go back out after we have that in hand. Six or eight weeks from now would put us in the November-December time frame, and that’s holiday time. So if it’s not done by the end of the year, it would be done first thing after the beginning of the calendar year.”

Community and Support Services Manager Nate Strauch said Sherman values the land on that corner of the city very highly.

“We have a great interest in seeing that it’s developed in a way that’s beneficial to our current and future citizens,” Strauch said via email. “That’s why we rejected the bids that failed to meet our minimum specifications and decided to explore other options — out of fairness to other potential investors. The end goal here is to partner with someone who shares our vision to turn this land into an asset that will complement Sherman Crossroads and anchor the city’s south side for decades to come.”

The Sherman Crossroads development on the northwest corner of the Hwy. 75 and FM 1417 intersection currently has a freestanding emergency room and DaVita medical office under construction. Sherman Crossroads Ltd. is planning a mixed-use development of commercial and retail offerings it expects will complement the medical development taking place. City staff said the development as a whole is expected to increase the property tax base by $30 million to $50 million during its lifetime, and significantly expand the city’s sales tax base.

SEDCO President John Plotnik said the city is overseeing the sale of the 22 acres on the southeast corner of the intersection, but he believes it is a good location for a mixed-use retail development, similar to what has been developed near the intersection of Hwy. 75 and U.S. Highway 82.

“It’s the last — in my mind — hard corner in Sherman,” Plotnik said. “The city’s going to take the lead on this, not SEDCO. So they will figure out what their concept would be, what their perception of the corner would be, and then put it again out for bid.”

The council agreed to put the land up for competitive bid in June after Strauch said the city had received interest in the land.

“I look forward to us having some more positive things happen on the south end of (Hwy.) 75 there where (FM) 1417 (is),” Deputy Mayor Jason Sofey said. “I think we made a financially wise decision by wanting a larger sampling of bids to come in and to work out a better plan for that area.”

The council also recently approved a request to advertise for a construction manager-at-risk for the work to build a new fire station No. 4 on the west side of Northgate Drive. City staff previously said the move will give firefighters better access and a greater ability to serve the southern half of the city and its projected growth.

Plotnik said in June that it would likely be at least 18 months before the property at Hwy. 75 and FM 1417 could be sold because of the fire station needing to be relocated.