HomeMy WebLinkAbout09-26-16 CC Mtg - A3. MDT-Rouse Property Public Hearing Date
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
SUBJECT: Consider Setting a Public Hearing to Determine the Possible Sale
of the MDT/Rouse Property
MEETING DATE: September 26, 2016
AGENDA ITEM TYPE: Action
RECOMMENDATION: Schedule a public hearing for MDT/Rouse Property and dedicate all resources from potential sale toward City’s share of the Law and Justice Center project.
BACKGROUND: In light of the pending election and the proposed joint Law and
Justice Center bond, the City Commission should discuss the merits of selling the City-owned
MDT site and allocating the resources to offset City debt connected to the new Law and Justice Center project. On July 14, 2014, the Commission adopted Ordinance 1894 authorizing the City Manager to
approve a land exchange conveyance agreement between the Montana Department of
Transportation (MDT) and the City of Bozeman. The City received approximately 8.1 acres owned by the MDT at 907 Rouse Avenue in exchange for 12 acres at the Water Reclamation Facility (at the intersection of Nelson and Frontage Roads) that was determined no longer
necessary for the conduct of City Business at a November 2013 public hearing. The July 2014
action consummated a year of work with MDT to facilitate an exchange to provide a high
visibility location for the City’s criminal justice functions as well as an aquatics center, and provide for redevelopment along the Rouse Avenue Corridor. In November 2014, property tax measures to fund the construction and operation of the proposed Rouse Justice Center were
defeated at the polls.
If the proposed Joint Law and Justice Center is approved this November, the Rouse property will no longer be needed for this purpose. Additionally, multiple parties have expressed interest in
buying the property for redevelopment. We are looking to the Commission for guidance on what
to do with the property going forward.
If sold, the City could allocate all resources from the sale toward the new joint Law and Justice Center project, thus reducing the City’s share of debt. The City Commission should discuss the
property and direct staff on how best to move forward. I have attached Bozeman Municipal Code
Chapter 2, Article 5, Division 5, which details our options for selling City property. If the City
Commission decides to sell, our next step is to hold a public hearing per Bozeman Municipal
Code Sec. 2.06.880. If the property is sold, Sec. 2.06.890 requires that “a sale may not be made for less than 90 percent of the appraised value.” In 2013 the property was appraised at a value of
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$1,033,000. See attached appraisal. If the City Commission decides to sell the parcel, a new
appraisal will be required to determine its present market value.
UNRESOLVED ISSUES: None ALTERNATIVES: As suggested by the City Commission.
FISCAL EFFECTS: None established at this time.
Attachments:
Appraisal of Rouse Property Bozeman Municipal Code Division 5: Acquisition and Transfer of City Property
Report compiled on: 9.19.16
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DIVISION 5. ‐ ACQUISITION AND TRANSFER OF CITY PROPERTY
Sec. 2.06.850. ‐ Authorization for city to obtain property.
The city commission has jurisdiction and power, under such limitations and restrictions as are prescribed by law, to purchase, receive by donation or exchange, or lease any real or personal property necessary for the use of the city and to preserve, take care of, manage, and control the same.
(Ord. No. 1658, § 1(2.05.010), 1-17-2006)
Sec. 2.06.860. ‐ Appraisal required for certain purchases of real property or conservation easements.
Unless otherwise provided by law, the city may not purchase real property in an amount in excess of $200,000.00 or a conservation easement using public funds in an amount in excess of $40,000.00 unless
the value of the property or conservation easement has been previously estimated by a disinterested certified general real estate appraiser selected by the city manager.
(Ord. No. 1658, § 1(2.05.020), 1-17-2006; Ord. No. 1683, § 1, 11-27-2006)
Sec. 2.06.870. ‐ Authorization to sell and exchange city property.
A. The city commission has the power to sell, trade, or exchange any real or personal property, however acquired, belonging to the city that is not necessary to the conduct of city business or the preservation of its property.
B. Whenever the city purchases equipment, as provided in MCA 7-5-4301 through 7-5-4310, city equipment that is not necessary to the conduct of the city business may be traded in as part of the purchase price or may be sold at public auction, as provided in MCA 7-5-4310, in the discretion of the city manager.
C. Any sale, trade, or exchange of real or personal property must be accomplished under the provisions of this division. In an exchange of real property, the properties must be appraised, and an exchange of city property may not be made unless property received in exchange for the city property is of an equivalent value. If the properties are not of equivalent values, the exchange may be completed if a cash payment is made in addition to the delivery of title for property having the lesser value.
D. If the city owns property containing a historically significant building or monument, the city may sell or give the property to nonprofit organizations or groups that agree to restore or preserve the property.
The contract for the transfer of the property must contain a provision that:
1. Requires the property to be preserved in its present or restored state upon any subsequent transfer; and
2. Provides for the reversion of the property to the city for noncompliance with conditions attached to the transfer.
(Ord. No. 1658, § 1(2.05.030), 1-17-2006)
Sec. 2.06.880. ‐ Requirements for certain sales.
When the city commission, after public hearing, has determined by a two-thirds vote of all the members that any real property owned by the city is not needed for public use, or that the public interest may be
furthered, the city may sell such property by bid, auction with reserve, or negotiated sale or exchange,
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subject, where appropriate, to a minimum price established through an appraisal that certifies the value of such property. Notice of sale, exchange, or auction shall be published as provided in MCA 7-1-4127. The
city may terminate the sale procedures used at any time and may reinitiate the same or different procedures at a later date.
(Ord. No. 1658, § 1(2.05.040), 1-17-2006; Ord. No. 1713, § 1, 8-27-2007)
Sec. 2.06.890. ‐ Terms of sale.
A. Except as provided in section 2.06.870.D, a sale under this division must be for cash or on terms that the city commission may approve, provided that at least 20 percent of the purchase price is paid in
cash. All deferred payments on the purchase price of any property sold must bear interest at a market rate, payable annually, and may be extended over a period of not more than five years.
B. Subject to section 2.06.870.D, a sale may not be made for less than 90 percent of the appraised value.
C. Subject to section 2.06.870.D, the title to any property sold may not pass from the city until the
purchaser or the purchaser's assigns have paid the full amount of the purchase price into the city treasury for the use and benefit of the city.
(Ord. No. 1658, § 1(2.05.050), 1-17-2006)
Sec. 2.06.900. ‐ Appraisal required for certain sales.
Unless otherwise provided, no sale of real property shall be made of any property unless it has been
appraised within one year prior to the date of the sale.
(Ord. No. 1658, § 1(2.05.060), 1-17-2006)
Sec. 2.06.910. Use of proceeds of property disposition.
The funds derived from property disposed of in accordance with this division, in the discretion of the
city commission, may be credited to any account that is in the best interest of the city.
(Ord. No. 1658, § 1(2.05.070), 1-17-2006)
Secs. 2.06.920—2.06.1040. ‐ Reserved.
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