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HomeMy WebLinkAboutLetter of intent from CATELLUS GROUP, LLC for purchase of the Carnegie Parking Lot at 106 East Mendenhall St.pdf1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Brit Fontenot, Economic Development Liaison Chris Kukulski, City Manager SUBJECT: Letter of intent (LOI) from CATELLUS GROUP, LLC (CATELLUS) for purchase of the Carnegie parking lot located at 106 East Mendenhall Street. MEETING DATE: May 2, 2011 AGENDA ITEM TYPE: Action Item RECOMMENDATION: 1) Acknowledge receipt of the CATELLUS LOI; 2) authorize the City Manager to sign the LOI; and 3) authorize the City Manager to order an appraisal on the Carnegie parking lot located at 106 East Mendenhall Street. BACKGROUND: On April 15, 2011 the City of Bozeman received a Letter of Intent from CATELLUS for the purchase of the Carnegie parking lot located at 106 East Mendenhall Street in downtown Bozeman for the purpose of exploring the feasibility of constructing a hotel with ancillary services. (Attachment 1) The Carnegie lot is located at the northwest corner of North Black Avenue and East Mendenhall Street. The property was purchased by the City in 1979. The lot size is 26,654 sq. feet and is currently configured for 71 parking spaces. (Attachment 2) By authorizing the City Manager to sign the LOI, the City Commission binds neither the City nor CATELLUS into selling or purchasing the Carnegie lot. If progress is made and the project determined feasible, a detailed and precise Purchase and Sale agreement will eventually be directly negotiated with CATELLUS and considered by the City Commission via the ordinance process, perhaps in early June, 2011. However, prior to an ordinance authorizing the Purchase and Sale, the Commission must conduct a public hearing to consider if the “real property owned by the City is no longer needed” as defined in Section 2.05.040 of the Bozeman Municipal Code. Additionally, the Parking Commission, in public meetings, will make recommendations to the City Commission related to any changes to the use of the Carnegie parking lot. The LOI is a mechanism for beginning a dialogue and building a relationship with CATELLUS for the exploration of the possibility of the construction of a downtown hotel. As acknowledged in the LOI, CATELLUS is aware of the municipal process of acquiring and transferring of publically owned property as required by Bozeman Municipal Code 2.05. (Attachment 3) Section 2.05.060 104 2 requires that “[u]nless 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.” Staff expects that the negotiation and sale process will be as efficient as possible but thoughtful and deliberate with many opportunities for public comment and involvement. FISCAL EFFECTS: Immediate fiscal effects include the cost of an appraisal or appraisals of the Carnegie parking lot. Recent estimates for one appraisal range from approximately $3,500 to $4,000. The cost of the appraisal(s) will be borne by the Parking Enterprise Fund. If sold, it is likely that staff will recommend that proceeds from the sale of the Carnegie parking lot be deposited in the Parking Enterprise Fund. Long term fiscal effects are undetermined. ALTERNATIVES: As suggested by the City Commission Respectfully submitted, Brit Fontenot Economic Development Liaison Attachments: 1) Letter of intent for the purchase of parking lot at 106 E. Mendenhall; 2) Aerial photograph of the Carnegie parking lot; and 3) Chapter 2.05 of the Bozeman Municipal Code – Acquisition and Transfer of City Property. 105 106 107 N BLACK AVE E MENDENHALL ST N BOZEMAN AVE 6 inch 10 inch10 inch6 inch 6 inch 6 inch10 inch6 inch 8 inch8 inch6 inch 8 inch6 inch 8 inch 8 inch 6 inch 6 inch 8 inch8 inch8 inch100 0 10050 Feet¯1 inch = 50 feet Legend Parcels Water Mains Sewer MainsRevised: 4/12/11 108 ORDINANCE NO 1658 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN MONTANA PROVIDING THAT THE BOZEMAN MUNICIPAL CODE BE AMENDED BY ADDING CHAPTER 2 05 PERTAINING TO ACQUISITION AND TRANSFER OF CITY PROPERTY BE IT ORDAINED by the City Commission of the City of Bozeman Montana Section 1 That Chapter 2 05 be added to the Bozeman Muni4cipal Code so that such Chapter shall read as follows Chapter 2 05 ACQUISITION AND TRANSFER OF CITY PROPERTY 2 05 010 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 2 05 020 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 10 000 200 000 or a conservation easement using public funds in an amount in excess of 40 000 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 The City may not pay more than the appraised value for the real property or conservation easement 2 05 030 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 M C A Sections 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 7 5 4310 in the discretion of the City Manager or City Manager s designee C Any sale trade or exchange of real or personal property must be accomplished under the provisions of this Chapter In an exchange of real property the properties must be appraised 109 andanexchangeofCitypropertymaynotbemadeunlesspropertyreceivedinexchangefortheCitypropertyisofanequivalentvalueIfthepropertiesarenotofequivalentvaluestheexchangemaybecompletedifacashpaymentismadeinadditiontothedeliveryoftitleforpropertyhavingthelesservalueDIftheCityownspropertycontainingahistoricallysignificantbuildingormonumenttheCitymaysellorgivethepropertytononprofitorganizationsorgroupsthatagreetorestoreorpreservethepropertyThecontractforthetransferofthepropertymustcontainaprovisionthat1requiresthepropertytobepreservedinitspresentorrestoredstateuponanysubsequenttransferand2providesforthereversionofthepropertytotheCityfornoncompliancewithconditionsattachedtothetransfer205040RequirementsforcertainsalesWhentheCityCommissionhasdeterminedafterpubliChearingthatanyrealpropertywhichisownedbythecityisnolongerneededthepropertymaybesoldbybidauctionwithreserveornegotiatedsaleorexchangesubjectwhereappropriatetoaminimumpriceestablishedthroughanappraisalthatcertifiesthevalueofsuchpropertyNoticeofsaleexchangeorauctionshallbepublishedasprovidedinMCASection714127Thecitymayterminatethesaleproceduresusedatanytimeandmayreinitiatethesameordifferentproceduresatalaterdate205050TermsofsaleAExceptasprovidedinSection205030DasaleunderthispartmustbeforcashorontermsthattheCityCommissionmayapproveprovidedthatatleast20ofthepurchasepriceispaidincashAlldeferredpaymentsonthepurchasepriceofanypropertysoldmustbearinterestattherateof6ayearamarketratepayableannuallyandmaybeextendedoveraperiodofnotmorethanfiveyearsBSubjecttoSection205030Dasalemaynotbemadeforlessthan90oftheappraisedvalueCSubjecttoSection205030DthetitletoanypropertysoldmaynotpassfromtheCityuntilthepurchaserorthepurchasersassignshavepaidthefullamountofthepurchasepriceintotheCitytreasuryfortheuseandbenefitoftheCity205060AppraisalrequiredfOfcertainsalesUnlessotherwiseprovidednosaleofrealpropertyshallbemadeofanypropertyunlessithasbeenappraisedwithinthreerronthaoneyearpriortothedateofthesale2110 2 05 070 Use of proceeds of property disposition The funds derived from property disposed of in accordance with this chapter in the discretion of the City Commission may be credited to any account that is in the best interest of the City Section 2 Repealer All resolutions ordinances and sections of the Bozeman Municipal Code and parts thereof in conflict herewith are hereby repealed Section 3 Savinas Provision This ordinance does not affect the rights and duties that matured penalties that were incurred or proceedings that were begun before the effective date of this ordinance Section 4 Severabilitv If any portion of this ordinance or the application thereof to any person or circumstances is held invalid such invalidity shall not affect other provisions of this ordinance which may be given effectwithout the invalid provisions or application and to this end the provisions of this ordinance are declared to be severable Section 5 Effective Date This ordinance shall be in full force and effect thirty 30 days after final adoption PASSED by the City Commission of the City of Bozeman Montana on first reading at a regular session thereof held on the 19th day of December 2005 dffj ANDREW L CETRARO Mayor ATTEST ifP4 J R IN L SULLIVAN City Clerk 3 111 PASSEDADOPTEDANDAPPROVEDbytheCityCommissionoftheCityofBozemanMontanaonsecondreadingataregularsessionthereofheldonthe17thdayofJanuary2006ILCJEFFKUSMayorATTESTC2ROBINLSULLIVANCityClerkAPPROVEDASTOFORM4112