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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 12/21/2004 (3) MINUTES OF THE SPECIAL MEETING OF THE COUNCIL OF THE CITY OF GLENDALE, MARICOPA COUNTY, ARIZONA, HELD TUESDAY, DECEMBER 21, 2004, AT 2:30 P.M. The meeting was called to order by Mayor Elaine M. Scruggs, with Vice Mayor Thomas R. Eggleston and the following Councilmembers present: Joyce V. Clark, Steven E. Frate, David M. Goulet, H. Philip Lieberman, and Manuel D. Martinez. Also present were Ed Beasley, City Manager; Pam Kavanaugh, Assistant City Manager; Craig Tindall, Acting City Attorney; and Pamela Hanna, City Clerk. COMPLIANCE WITH ARTICLE VII, SECTION 6(c) OF THE GLENDALE CHARTER A statement was filed by the City Clerk that the one resolution to be considered at the meeting were available for public examination and the title posted at City Hall more than 72 hours in advance of the meeting. RESOLUTION 1. PROPERTY ACQUISITION FOR A PUBLIC SAFETY & COURT COMPLEX Mr. Art Lynch, Chief Financial Officer; Ian Vasey, Economic Development Director; and Jennifer Reichelt, Senior Management Assistant; presented this item. This is a request for the City Council to approve the acquisition of property located at 4701 West Glendale Avenue (5 acres) for the development of a Public Safety and City Court complex. This land acquisition will address the City Council's goal of redevelopment in the City Center area. The property is located at 4701 West Glendale Avenue and is owned by the Larry H. Miller Corporation. The site is approximately 5.051 acres and includes a 54,000 square feet facility that was constructed in the early 1990s. This site is currently an under-performing property and has been vacant for over a year. The city recently completed a court needs assessment, which identified the future needs for Glendale City Court. This site will accommodate a new 90,000 square feet court complex, which will meet the long-term needs of the court. Public Safety is in need of a larger office complex to accommodate all of their staffing and administrative functions. Once renovated, the existing facility on the site could accommodate Public Safety operations. 1 Both the Police Chief and the City Judge recommend having the City Court and Public Safety operations in close proximity to the other. Co-locating the facilities on the same site will help streamline the administrative processes and is cost effective. Larry H. Miller Corporation has agreed to sell the property to the City of Glendale for $3.6 million. With interest, the total purchase price will equal $3.7 million ($3,736,080). A deposit of 25% ($900,000) will need to be made before December 31, 2004. The balance will be paid out in annual payments over five years at an interest rate of 1.68%. The payment schedule is as follows: Deposit $900,000 Year 1 $585,360 Year 2 $576,288 Year 3 $567,216 Year 4 $558,144 Year 5 $549,072 Total $3,736,080 For business purposes, the Larry H. Miller Corporation needs to include the sale of the land in this year's tax statement, so it must receive the deposit for the property by December 31, 2004. The city will continue its due diligence prior to closing. The sale will be contingent upon completion of final due diligence. An appraisal of the property was conducted by Roger L. Dunlap & Associates, Ltd., which supports the purchase price of$3.6 million. The Council directed staff to begin implementation of the redevelopment strategy at the November 2, 2004 workshop. The Council approved a Capital Improvement Program (CIP) request for the purchase of land for a new City Court complex in the amount of$3.7 million. A Glendale City Court needs assessment was completed in 2004, which identified future space needs. Redevelopment of under-performing properties will spur economic development in the area. A new, enhanced and co-located Public Safety and Court Complex will allow the city to continue to meet the needs of Glendale residents and provide better customer service. Funds are available in the Land for City Court Building account 97-9422-8100. 2 Grants Capital Expense One-Time Cost Budgeted Unbudgeted Total X $3,736,080 Account Name, Fund, Account and Line Item Number Land for City Court Building, Account No: 97-9422-8100 The recommendation was to waive reading beyond the title and adopt a resolution authorizing the City Manager to sign all documents necessary to effect the purchase of the property located at 4701 West Glendale Avenue in an amount not to exceed $3,736,080, plus customary closing costs. Mr. Beasley said staff is requesting Council approval to purchase five acres located at 4701 West Glendale Avenue. He stated the purchase price of the property is $3.6 million, with a $900,000 deposit. He explained purchasing the property is consistent with the Council's request to move forward with the downtown redevelopment policy and will have certain tax benefits to the city. He said the term would be over a six-year period at an interest rate of 1.68 percent. Ms. Reichelt stated the five-acre site includes a building, which measures just over 54,000 square feet. She said Larry Miller Corporation previously owned the building and the city's intention is to develop the site as a public safety and city court complex. She pointed out the Larry Miller Corporation has to close on this deal by the end of the tax year, resulting in the need for Council's special session. She stated the seller is asking $3.6 million, including a $900,000 deposit. She said the remaining $2.7 million will be paid through annual payments over five years at an interest rate of 1.68 percent, bringing the total purchase price to a little over $3.7 million. She stated the City Attorney's Office is working with the seller's legal representatives to ensure all due diligence is done before the contracts are signed. Mr. Ian Vasey explained Council directed staff in November to begin the implementation of the tiered strategy for redevelopment of the downtown area. He said the purchase of the subject property will further Council's goals and build on an acquisition undertaken last month of the fire station property at 52nd Avenue. He stated the development of the public safety and court complex will create a visually appealing entryway feature into the downtown area. He said the purchase represents a significant step in fulfilling the Council's commitment to redeveloping the downtown area and a significant public investment. Mr. Art Lynch reiterated the acquisition price was set at $3.6 million, noting the appraisal came in at the same amount. He said staff attempted to negotiate a tax structure that benefits both the seller and city. He stated the payment structure includes a $900,000 down payment and $540,000 payments each year for five years. 3 Councilmember Martinez asked where the funds will come from to make the $540,000 yearly payments. Mr. Lynch explained there are budgeted funds available for land acquisition of courts. He stated future project and future economic development land acquisition monies are also available. He said the funds are already in the bank or the bonds will be soon sold. He explained, in order to ensure the city has the ability to move forward, they issued a Declaration of Intent to Reimburse. Councilmember Martinez asked if the city would have the opportunity to refinance the deal in the future. Mr. Lynch said in this situation, the seller was willing to carry the financing. He noted the term is quite short compared to normal financing. Mr. Craig Tindall pointed out the note has no pre-payment penalty, stating the city would be free to repay the note and refinance the loan if it found another structure it felt was more attractive. Mayor Scruggs asked if Court Bond funds the court needs to proceed with the design of the building will be used to purchase the property. Mr. Lynch responded no, explaining the money used for the down payment was designated for land acquisition. Councilmember Clark asked how much money does the city currently have and how much in additional bond issuances will have to occur to purchase the property. She also asked if the additional bond issuances will affect the city's ability to issue bonds for other projects already in the Capital Improvement Program. Mr. Lynch clarified the Capital Improvement Program already has court improvement and public safety improvement projects. He said the city periodically issues bonds to ensure funds are available when a property is acquired or construction starts. He explained the city does a Declaration of Intent to Reimburse to provide notification to the federal government that the city intends to use funds that may be borrowed for this project. He stated the 1.68 percent interest rate represents the borrowing for this land acquisition. He said they are not bumping any projects in order to accelerate the purchase of this property, stating the funds were already slated for 2005 in the Capital Improvement Program. Councilmember Clark pointed out the city already has a public safety and court complex, asking why the city is proposing to acquire a new complex. Mr. Vasey stated the city is currently undergoing a Needs Assessment, noting the court's needs are expected to double within the next 20 years. He said the administrative needs of the Police and Fire Departments who will share the facility are also expected to grow. Councilmember Clark asked if other departments within the city will use the existing court complex. Mr. Vasey responded yes. Councilmember Clark asked what they expect it to cost to construct the new court facility. Mr. Vasey said it is premature at this point to discuss the cost of building the new court facility. Ms. Schurhammer explained the current Capital Improvement Program includes a court budget of$1.6 million in 2007/08 and $20.9 million in 2008/09 for design and construction. She stated $3.7 million is budgeted for this fiscal year for the purchase of the court facility. 4 Councilmember Clark noted Phase I and II environmental assessments have not yet been completed. She asked if it will be the city's burden to remediate any issues discovered during those assessments. Mr. Tindall said they have discussed having the deposit agreement held in escrow in itemized contingencies, including environmentals, surveys, title insurance, and so forth. He explained doing so will, in effect, protect the city with recordable documents that would reverse the transaction and return the money held in escrow if situations are discovered that would be adverse to the city's interests. Councilmember Goulet asked if the first payment would be due prior to the end of the city's current fiscal year. Mr. Lynch stated the documents that have been drafted place the payments in December of each year. Councilmember Lieberman pointed out the city will realize a substantial savings, explaining the city is not only getting the building, but land for the court building as well. Mr. Ken Oligard, Larry Miller Corporation, stated they are pleased with the proposed agreement and believe it will benefit both the city and his company. Mayor Scruggs opened the public hearing on Agenda Item No. 1. As there were no comments, Mayor Scruggs closed the public hearing. Resolution No. 3815 New Series was read by number and title only, it being A RESOLUTION OF THE COUNCIL OF THE CITY OF GLENDALE, MARICOPA COUNTY, ARIZONA, AUTHORIZING AND DIRECTING THE CITY MANAGER TO ACQUIRE CERTAIN REAL PROPERTY LOCATED AT 4701 WEST GLENDALE AVENUE IN GLENDALE, MARICOPA COUNTY, ARIZONA, FOR THE DEVELOPMENT OF A PUBLIC SAFETY AND CITY COURT COMPLEX; AND DIRECTING THE EXECUTION OF ANY DOCUMENTS NECESSARY TO EFFECTUATE SAID PURCHASE. It was moved by Eggleston, and seconded by Frate, to pass, adopt and approve Resolution No. 3815 New Series. The motion carried unanimously. CITIZEN COMMENTS No comments were made. COUNCIL COMMENTS AND SUGGESTIONS Mayor Scruggs stated today's action represents a landmark step forward in the redevelopment of the downtown area and meeting the long-term needs of the city court. She thanked everyone who worked to get the city to this point. 5 ADJOURNMENT There being no further business, the meeting was adjourned at 3:10 p.m. Pamela Hanna - City Clerk 6