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HomeMy WebLinkAboutDetermine whether property in Bridger Park Garage is necessary for City business Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Paul Burns, City Parking Manager SUBJECT: Public hearing to determine whether approximately 1000 sq. ft. of unfinished real property located on the second floor of the Bridger Park garage is necessary for the conduct of City business or the preservation of its property (2/3 vote of Commission required). MEETING DATE: June 4, 2012 RECOMMENDATION: That the Commission hold a public hearing, consider public comment, this staff memorandum, and the recommendation of the Parking Commission, and by a two-third majority of the Commission (i.e. four affirmative votes) determine the vacant office space on the second floor of the Bridger Park parking structure is no longer necessary for the conduct of city business or the preservation of city property and also that the public interest may be furthered by the sale of the property. Specifically, the staff recommends the Commission make the following two motions: PROPOSED MOTION: Having considered the information presented by staff, I move that the Commission find the subject office space located on the second floor of the Bridger Park garage on East Mendenhall Street is not necessary for the conduct of city business, or the preservation of City property, and that sale of the vacant space is in the public interest. NOTE: Per Section 2.06.880, Bozeman Municipal Code, a two-thirds vote of all members of the commission is necessary. AND PROPOSED MOTION: Having found the subject vacant office space located on the second floor of the Bridger Park garage on East Mendenhall Street is unnecessary for the conduct of city business, the preservation of its property and that the sale is in the public interest, I move the Parking Manager be authorized to complete all steps necessary to negotiate a sale and transfer of the property and return to the Commission an ordinance authorizing the City Manager to execute a Purchase and Sale Agreement for same. 145 It is important to note that the decision whether this real property is necessary for the conduct of the city’s business or the preservation of its property is NOT a final decision on the sale of the property. The Commission must at some point in the future when a buyer has stepped forward adopt an ordinance authorizing the City Manager to sign a negotiated purchase and sale agreement. BACKGROUND: The proposed property is approximately 1,000 square feet of office space located on the second floor of the Bridger Park parking structure and overlooking East Mendenhall Street (see attached diagram of the space). The Parking Commission has determined that the office is no longer needed for the operation and management of the Parking Enterprise’s business plan (see attached memo to the Parking Commission). The vacant space was originally conceived as a future office for the Parking Enterprise, but has sat empty and unfinished since Bridger Park opened in April, 2009. As the space is unfinished, several estimates have been received on what it might cost to make the space habitable. The estimates range from $50,000 to $60,000 for a ceiling, plumbing of a restroom, walls, and flooring. The Parking Enterprise views the required work as an unnecessary expense. Currently, the Parking Enterprise operates out of the Al Stiff Professional Building at 20 East Olive Street. Working from the Professional Building has helped the Parking Enterprise staff become integrated in City business and operations; it has allowed for the establishment of a rapport that would not exist were the staff isolated in Bridger Park. At its regularly scheduled monthly meeting in April 2012, the Parking Commission decided to explore the possibility of selling the office space. At its May meeting, the Parking Commission voted unanimously to recommend to the City Commission that the unfinished property was no longer part of the Parking Enterprise business plan and that the property was not necessary for the conduct of City business (see attached memo to the Parking Commission). AUTHORITY TO SELL REAL PROPERTY: The City Commission has authority over property owned by the city pursuant to Chapter 2, Article 6, Division 5 of the Bozeman Municipal Code (BMC). This chapter was created by Ordinance 1658 (2006) and later amended by Ordinances 1683 (2006) and 1713 (2007). The BMC requires the following when the city of Bozeman sells this type of real property: 1) The City must conduct a public hearing and determine by a two-thirds vote of all members of the Commission that any real property owned by the city is “not needed for public use, or that the public interest may be furthered…” (2.06.880, BMC). In addition, section 2.06.870.A, BMC, authorizes the City Commission to sell property “however acquired” that is “not necessary to the conduct of City business or the preservation of its property.” 2) The City may sell property using several listed methods: bid, auction with reserve, or negotiated sale or exchange, 2.06.880, BMC. 146 3) The City Commission may deposit the proceeds from the sale “in any account that is in the best interest of the city.” 2.06.910, BMC. 4) The sale of real property must be approved by an ordinance. Bozeman Charter, Sect. 2.11(5). 5) The sale may not be made for less than 90% of the appraised value. 2.06.890.B, BMC. 6) The appraisal must have been conducted within one year of the sale (2.06.900). UNRESOLVED ISSUES: If the Commission votes in the affirmative to declare the proposed office space unnecessary for the conduct of city business, the following events will take place: • Complete a real estate appraisal to determine the monetary value of the space with the Parking Enterprise covering the expense of appraisal services. • Create a condominium agreement. • Advertise and negotiate a purchase and sale agreement for the property subject to Commission approval. • Provisionally adopt an ordinance, that once effective, authorizes the City Manager to sign a Purchase and Sale Agreement with the buyer. • Prepare a deed to transfer title of new parcel from the City of Bozeman to the buyer. • Acquire monetary compensation from the buyer per the negotiated purchase price. FISCAL EFFECTS: The income generated from the sale of this space is proposed to be transferred to the Parking Fund to be managed by the Parking Commission for long-term maintenance of Bridger Park. Immediate fiscal effects include the cost of an appraisal of the space, and costs associated with creating a condominium. The cost of the appraisal(s) and legal costs associated with creation of a condominium will be borne by the Parking Enterprise Fund. ALTERNATIVES: As suggested by the City Commission Respectfully submitted, __________________________ Paul Burns, City Parking Manager Attachments: (1) Parking Commission Memorandum; (2) diagram showing the location of the space within the Bridger Park; and (3) office space floor plan. 147 Bozeman Parking Commission Memorandum REPORT TO: Honorable Chairman and Parking Commissioners FROM: Paul Burns, Parking Manager SUBJECT: Discussion and recommendation to the City Commission that the upstairs office in Bridger Park be sold. MEETING DATE: May 9, 2012 AGENDA ITEM TYPE: Action item. RECOMMENDATIONS: That the Bozeman Parking Commission offer its recommendation to the City Commission that the office space located on the second floor of Bridger Park be sold. Suggested motion: The Bozeman Parking Commission recommends to the City Commission that the approximately 1,000 square feet of unfinished office space that is located on the second floor of Bridger Park, and is owned by the City of Bozeman and managed by the Parking Commission, be sold as that property is not necessary to the conduct of City business or the preservation of its property. BACKGROUND: The proposed property is approximately 1,000 square feet overlooking East Mendenhall Street and north of the exterior wall of Bridger Park. On April 11, 2012, the Parking Commission moved, seconded and voted unanimously that the office is no longer needed for the operation and management of the Parking Enterprise’s business plan. The space was originally conceived as a future office for the Parking Enterprise, but has sat empty since Bridger Park opened in April 2009. The space is unfinished, and several estimates have been received on what it might cost to make the space habitable. The estimates range from $50,000 to $60,000 for a ceiling, plumbing of a restroom, walls, and flooring. The Parking Enterprise views the required work as an unnecessary expense. Currently, the Parking Enterprise operates out of the Al Stiff Professional Building at 20 East Olive Street. Working from the Professional Building has helped the Parking Enterprise staff become integrated in City business and operations; it has allowed for the establishment of a rapport with other City employees that would not exist were the staff isolated in Bridger Park. As stipulated by Bozeman Municipal Code, Section 2.06.870, the Parking Commission does not have the authority to sell public property. Selling city property can only be done by the City Commission. However, “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.” In Section 2.06.880, the Bozeman Municipal Code goes on to state, “When the City Commission, after public hearing, has determined by a two-thirds vote of all the members that 148 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 …” FISCAL EFFECTS: Because the property is part of the city’s existing element of the Intermodal Commerce Condominiums, it must be condominimized prior to being sold. The property must also be formally appraised. The costs of appraisal and being condominimized will be paid by the Parking Enterprise Fund. The sale shall not be consummated if it is found through ongoing due diligence that the cost of creating a legal address and appraising the property represent an unreasonable percentage of the total net proceeds. It is expected that the Parking Enterprise Fund will receive any and all proceeds from the sale of the office space. It is suggested that proceeds from the sale be used to fund operations and maintenance in Bridger Park. ALTERNATIVES: As suggested by the Parking Commission. Report compiled on: May 4, 2012 149 15 0 151