HomeMy WebLinkAboutI2 Potential Sale of the _Lower Yard_ parcel for a mobile home park Boat
_ Commission Memorandum
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REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
SUBJECT: Potential Sale of the "Lower Yards" Parcel for a Mobile Home Park
MEETING DATE: October 2, 2006
BACKGROUND: Attached is a proposal from Stockyard, LLC requesting "clear direction
from the City of Bozeman Commission to move forward with our efforts to develop a mobile
home park" partially located on an eight acre parcel of land owned by the City on North Rouse
Ave. Because the proposal is directly tied to a neighboring parcel that will include a deed
restriction of twenty years, I am asking the Commission to determine, prior to spending any
additional staff work, if this proposal is worthy of further consideration, due to this deed
restriction.
If the adjacent property utilized for the mobile home park has only a twenty year guarantee to be
utilized for the proposed mobile home park, I am tempted to recommend we consider leasing our
land for the same twenty year period. I have perceived that the Commission might not be
interested in selling City assets for a project that guarantees only twenty years of affordability.
Therefore, prior to spending additional staff time responding to the September 11 City
Commission discussions, we need additional Commission feedback based on the attached
proposal.
If it is determined that we should proceed, the next step in any sale of public property is to hold a
public hearing to determine "if the property is needed." That public hearing could be scheduled
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for October 16 .
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RECOMMENDATION: The City Commission determine if it would like Stockyard, LLC
and City staff to continue pursuing the development of a mobile home park development on a
portion of land owned by the City of Bozeman commonly referred to as the "lower yards".
If yes, we should consider leasing our property rather than selling it recognizing that we are only
assured twenty years of affordability due to the remaining parcel's twenty year deed restriction.
FISCAL EFFECTS: Unknown at this time.
ALTERNATIVES: As suggested by the City Commission.
Respectfully submitted,
Chris A. Kukulski, City Manager
Attachments: Stockyard, LLC memo and Real Property Option Agreement.
Report compiled on September 27, 2006
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DATE: September 25, 2006
REPORT TO: Honorable Mayor and City Commission
FROM: Stockyard, LLC
600 N. Wallace, #3
Bozeman, MT 59715
SUBJECT: Future sale of Tract 12 of the Northeast Annexation, City of
Bozeman, MT. for the purposes of creating a mobile home park.
ACTION ITEM:
We have clear direction from the City of Bozeman Commission to move forward
with our efforts to develop a mobile home park. During the work session of September
1 lth 2006, our Mayor requested a staff report for further review before the commission.
Our mission has not changed from our initial letter soliciting the City of Bozeman dated
September 9th 2006 as follows.
"The purpose of this solicitation is to provide an interim solution to the current crisis of
affordable housing in the City of Bozeman. Our intent is to develop a mobile home park
to provide a much needed supply of entry level housing stock. The mobile home park as
an option for people within the City of Bozeman_ is at risk of disappearing. Our mission
is to provide for this community need. "
Two issues were brought to the forefront during our presentation to the City
Commission. We are confident in proceeding further if we can agree on these points and
enter into the real estate option attached in this submittal.
Firstly,the City of Bozeman has a variety of existing uses currently on the
property. The most important step is a studied, extensive period of due diligence to
discover a solution that would work for existing city uses. We would do a great disservice
to the woman and men who work for the city if we did not understand the issues and
provide a studied solution. Our willingness to proceed with the work necessary to find a
studied solution comes only after agreements have been made in regard to the option
agreement. Please note the changes in the revised option agreement(section 7). We
added a contingency to the agreement. If a suitable solution for the existing uses is not
found, then the agreement becomes void.
Secondly,the term of the deed restriction on the portion of property sold under
this option agreement is twenty years. We respectfully present the term in section 6 of
the option agreement. We need to know up front if this term is acceptable at the time of
entering into the option agreement. We can not proceed with our development proposal if
the term of the deed restriction is anything greater than twenty years.
We respectfully request that the revised Real Estate Option Agreement be entered
into between the City of Bozeman and Stockyard, LLC. If the foregoing is acceptable to
you, kindly execute a copy of this proposal in the place set forth in the Option agreement
and return it.
Very truly yours,
STOCKYARD, LLC
By
Brian Caldwell
Its: Co-Manager
REAL PROPERTY OPTION AGREEMENT •--- Formatted:Level
This option agreement("Agreement") is entered into this date by and between City of Bozeman
("Optionor")of ,Bozeman,Montana,and Stockyard,LLC,a
Montana Limited Liability Company, of 600 N. Wallace, Bozeman, Montana, and/or assigns
("Optionee").
Section 1. Description of Real Pro e . The real property is situated in Bozeman,Montana,and
is described on Addendum A which is attached hereto and incorporated herein by reference
("Property").
Section 2. Grant of Option and Term_. Optionor grants to Optionee the exclusive right and
option to purchase the Property. The Option shall terminate Ninety(90)days after Optionee receives
preliminary plat approval for the property,("Expiration Date"J. If Optionee gives notice before the _- Deleted:,
end of the Ninety(90)days of its intent to purchase,then Optionee shall have an additional Thirty
(30)days to close,if closing does not occur before. If the Option is not exercised within said period,
it shall automatically terminate without any further action by Optionor and without any notice to
Optionee or any other person, and all rights of Optionee arising out of this Agreement shall
immediately cease. Optionee has the right to terminate Option at Optionee's sole discretion during
the term of the Option.
Section 3. Consideration. Upon execution of this Agreement, Optionee agrees to pay to
Optionor the sum of One Hundred Dollars($100.00.
Section 4. Purchase Price and Payment. if Optionee exercises this Option in the manner
described in this Agreement,the amount payable("Purchase Price")shall due and payable at Closing
and Purchase Price shall be determined by an appraisal of the land to take place within V days_of___ Deleted:6 1
closing The appraisal will be completed by an appraiser agreed upon by_both parties.parties._ _parties, comment:Tti1s 1r1„ys trn;
cannot agree upon an appraiser, each a will select an appraiser within three 3 days of their section into compliance with l
�' P PP � party PP ( ) Y Ordinance 16
-56'
failure to select a mutual appraiser. Within five(5)days the two selected appraisers will meet and Deleted:the execution of this agreement
select a third appraiser. The third appraiser will complete the appraisal. The purchase price will be
the appraised value of the land.
Section 5. Manner of Exercise. This Option shall be exercised ("Notice of Exercise") by
Optionee giving written notice to Optionor by either tendering such written notice in person to
Optionor or by sending such written notice to Optionor,certified mail,postage prepaid,which notice
shall be effective at the time it is placed in the United States mails. The date upon which such
written notice is tendered in person or the date when such notice is mailed as provided herein shall
be the exercise date. The notice shall designate a date for Closing which shall be no more than sixty
days from the date of the notice of exercise,unless a reasonable extension is necessary for financing
purposes.
Section 6. Conveyance and Optionor's Title. Optionor shall convey the property at Closing to
Optionee by statutory warranty deed, free and clear of all liens and encumbrances except zoning
ordinances,any existing covenants,a 20 year deed restriction ensuring that the property will remain a
mobile home park for those 20 years,reservations and federal patents, utility easements of record
Page 1 — REAL PROPERTY OPTION AGREEMENT
with no other exceptions. Optionor shall furnish to Optionee a standard owner's title insurance
policy in the amount of the purchase price,from a title insurance company selected by Optionee,
showing good and marketable title subject only to the exceptions above stated. Optionee may elect
to purchase an ALTA owner's policy with additional endorsements. Any additional expense above
and beyond the premium for a standard owner's policy shall be borne by Optionee. At least twenty
days after delivery of the Notice of Exercise,Optionor shall furnish to Optionee a preliminary title
report showing the condition of title to the Property. Optionee shall have twenty days after receipt of
the preliminary title report and exceptions within which to notify Optionor,in writing,of Optionee's
disapproval of any exceptions shown in the report,other than exceptions for current taxes not yet due
and payable,zoning ordinances,building and use restrictions,reservations,and federal patents and
utility easements of record. , Deleted:¶
Section 7. Contingency. This option is contingent upon Optionor finding suitablelocations for----1 Formatted.Tabs: -i°,Left
the existing uses of the Pro e . If the City reasonably determines that it cannot relocate the
existing uses,then it may terminate this Option.
Section . Optionoes Warranty. Optionor warrants that,as of the Closingdate there will be no
---- -------------- --------------------------- ---'---------- —"-" Deleted:
trespassers in position of any portion of the Property,there will be no leases affecting the Property, ` Formatted:Bullets and Numbering
and there will be no unrecorded liens affecting the Property created through the Optionee's voluntary -
act.
Section 9_ __ Closing_ Closing shall occur at the of ices of American Land and Title Company_"_-I Meted:
("Escrow Agent"). Closing shall take lace in the manner set forth in this Agreement, and the 4 - _�
$ )• g P � '�Formatted:Bullets and Numbering
Escrow Agent shall prorate as of the Closing date,rents and other normal prorations on a fiscal year --
basis. Optionor shall pay all delinquent property taxes from the proceeds at closing. Optionee shall
pay the costs of the closing agent.
Sections___Remedies. The parties shall_be_entitled to such remedies for breach of contract-as-"_" Deleted.-
may be available under applicable law including, without limitation, the remedy of specific y Formatted:gullets and Numbering j
performance. -
Section I I.__ Assignment._This Option Agreement shall be binding upon and inure to the benefit of Deleted:
the parties hereto, and their respective heirs, personal representatives, successors and assigns. gullets and Numbering 1
Optionee shall have the right to assign any interest hereunder without the prior written consent of
Optionor to an entity owned in whole or part by Optionee("Affiliate Entity"). In the event that
Optionee assigns Optionee's interest to a party other than Affiliate Entity,then Optionee must receive
prior written approval from Optionor,which approval cannot be unreasonably withheld.
Section 12.-- Time. Time is of the essence of this Agreement._____ _____ -- Deleted:
` Formatted:Bullets and Numbering
Section 13s__Tes ne• After the execution of this Agreement,Optionee may conduct testing upon __ Deleted: iz
the property,including evasive testing,but Optionee shall restore the property to the same condition
it was in prior to testing. Optionee shall hold Optionor harmless from any property damage or
personal injury that may occur upon the property by reason of acts by Optionee, its agents, or
employees.
Page 2 - REAL PROPERTY OPTION AGREEMENT
IN WITNESS WHEREOF,the parties have executed this Agreement on this day of
,2006.
Optioner:City of Bozeman By:
Its:
Optionee: Stockyard,LLC By:
Brian Caldwell
Its:Co-Manager •--- Formatted:Level i
By:
Eric Nelson
Its: Co-Manager
Page 3 — REAL PROPERTY OPTION AGREEMENT