HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/05/2005 - FIRST READING OF ORDINANCE NO. 077, 2005, AUTHORIZ ITEM NUMBER: 33
AGENDA ITEM SUMMARY DATE: July5, 2005
FORT COLLINS CITY COUNCIL STAFF: Greg Byrne
SUBJECT
First Reading of Ordinance No. 077, 2005, Authorizing the Sale of City-owned Property
Consisting of a Portion of Block 33,Fort Collins, Colorado, to Penny Flats, LLC.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT
Under the proposed sales agreement, the City would receive, over the life of the agreement, the
appraised value of the property, $1,624,000, plus interest at seven percent per year on any unpaid
portion. Additional positive financial impacts for the City include sales and use tax on
construction materials, associated user fees, and impact fees. (See Attachment 2 for a financial
impact summary.)
EXECUTIVE SUMMARY
In July 2004, the City Council adopted Resolution 2004-081 setting out a process for selling
portions of Block 33 to a private developer. Staff entered into an exclusive negotiating
agreement with Coburn Development after receiving eight proposals and interviewing four
teams. Coburn has complied with all provisions of the agreement, and has decided to proceed
with development of the property.
Coburn has named the project Penny Flats. It will have approximately 150 dwelling units in a
mixed use project with approximately 30,000 square feet of commercial space. Parking would
be provided on site, in a combination of below-ground and at-grade spaces.
The sale would be accomplished in phases, with Coburn purchasing property for each phase
prior to commencement of construction. The City would grant Coburn options on future phases,
with interest on the unpurchased portions accruing to the City at seven percent. They would
receive easement(s) on the City land for construction easements.
The City would retain ownership of the Trolley Car Barn and associated parking area.
July 5, 2005 -2- Item No. 33
BACKGROUND
Block 33 has been acquired over the years by the City of Fort Collins, originally with an eye
toward pubic uses. Options included a new community center, a new library, a new performing
arts center, or a parking garage.
All the potential public uses, with the exception of a parking garage, have been fulfilled on other
sites. Staff has concluded that a parking garage on Block 33 would not be consistent with the
Civic Center Plan.
In 1997, in conjunction with the City Plan process, a new Civic Center Plan was also adopted. It
called for residential development of the block. That land use goal was reinforced with the
Downtown Strategic Plan a few years later.
In 2004, the Council reviewed several options for disposing of the property, and decided to place
a strong emphasis on residential development that complied with the Civic Center Plan, rather
than simply trying to maximize return on the sale. Therefore, the staff issued an RFP that invited
potential developers to assess the market for residential development, and to propose a project
that would meet the market.
The current proposal is a result of a several-month-long process. The developer and staff are
persuaded that a healthy market for downtown living exists in Fort Collins. Coburn
Development has completed conceptual designs for the project, performed a market analysis,
completed an environmental assessment, and made an offer to purchase.
An important component of the Civic Center Plan is a pedestrian spine, running north-south
through Block 33, and the public blocks to the south. The spine is the central organizing
element, and we will seek financial assurances in the agreement from Coburn that it will be built.
The staff and Coburn have coordinated their planning carefully with the Downtown
Development Authority. DDA may choose to participate in project financing in order to achieve
a higher level of materials and public improvements.
Coburn proposes to enter into a purchase agreement with the City as soon as reasonably feasible
after Council approval, and to prepare a full development application for City review. The
development review process will follow all City rules and regulations. The timetable calls for
construction to begin in August 2006. Future phases would occur through 2009.
Staff proposes to include in the agreement, a requirement that the entire site be developed within
a certain time frame. If it is not, the option on the property would expire, or Coburn would be
required to propose an extension.
Sale of the property would be tied to a requirement that it be developed as proposed. Coburn
would not have the ability to purchase the site, and remarket it to a third party. Nor would
Coburn be permitted to purchase the property, and build something entirely different, without
renegotiation with and approval by the City.
July 5, 2005 -3- Item No. 33
The benefits to the City are the same as those outlined in the original report to the Council last
year. Briefly, they include:
• The property would be developed consistent with Council-adopted master
plans. This is an important "transition site" between Martinez Park on the
north, and the pubic office buildings to the south, and includes portions of
the Civic Center Spine.
• The development will contribute to the resident and customer base
downtown, strengthening neighborhoods and retail.
• The property would return to the tax rolls.
• The project is infill, making use of existing infrastructure.
• The City will receive full appraised value, and revenues from other fees
and taxes.
Staff recommends approval of the Ordinance and believes that the proposal fully complies with
the direction given by City Council last year. The proposed use of the property promises to
achieve important City goals with minimal risk to the public. At the same time, it provides
experienced private sector capability, market assessment, and assumption of risk. Council
adoption of the Ordinance will permit the City Manager to negotiate an agreement in substantial
compliance with the terms described in the AIS.
ATTACHMENTS
1. Vicinity Map
2. Location Map
3. Financial Impact Summary
ORDINANCE NO. 077, 2005
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE SALE OF CITY-OWNED PROPERTY
CONSISTING OF A PORTION OF BLOCK 33, FORT COLLINS, COLORADO,
TO PENNY FLATS, LLC.
WHEREAS,the City of Fort Collins is the owner of that certain real property located in Fort
Collins,Latimer County, Colorado, described as Block 33; and
WHEREAS, the City acquired Block 33 over time with the intention of having it available
for future public use; and
WHEREAS,a new Civic Center Plan adopted in 1997 called for residential development of
Block 33; and
WHEREAS, the Land Use Code permits residential mixed-use development in the zone
district applied to Block 33; and
WHEREAS, in July 2004, the City Council adopted Resolution 2004-081 setting out a
process for selling Block 33 to a private developer ready, willing and able to develop the Block in
rigorous conformity with the City's comprehensive plan; and
WHEREAS,through use of a Request for Proposals process,the City solicited proposals and
selected Coburn Development, Inc. ("Coburn"), to develop a proposed project for Block 33; and
WHEREAS, Coburn is proposing that the City sell certain portions of Block 33 referred to
below as the 'Property" and more particularly described as Lots 1-8 and Lots 13-16,Block 33,City
of Fort Collins, County of Latimer, State of Colorado to Penny Flats, LLC, a company comprised
of the owners of Coburn and other possible investors, in phases, for a total purchase price of
$1,624,000, plus interest at seven percent per year on any unpaid portion; and
WHEREAS, as part of its agreement with the City, Coburn shall be required to develop the
Property in accordance with the proposal approved by the City,to comply with the requirements of
the City's development review process, and provide assurances that the "pedestrian spine" linking
Block 33 with the rest of the Civic Center will be completed; and
WHEREAS, Section 23-111 of the City Code provides that the City Council is authorized
to sell, convey or otherwise dispose of real property owned by the City, provided the Council first
finds by ordinance that any sale or other disposition of real property owned by the City is in the best
interest of the City of Fort Collins.
NOW,THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS, as follows:
Section 1. That the sale of the Property for ONE MILLION SIX HUNDRED TWENTY
FOUR THOUSAND DOLLARS($1,624,000.00)plus seven percent interest on any unpaid balance
is in the best interest of the City of Fort Collins.
Section 2. That the Mayor is hereby authorized to execute such conveyance documents as
are necessary for the City to sell and convey the Property consistent with the terms and conditions
described above.
Introduced,considered favorably on first reading,and ordered published this 5th day of July,
A.D. 2005, and to be presented for final passage on the 19th day of July, A.D. 2005.
Mayor
ATTEST:
City Clerk
ATTACHMENT
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Attachment 3
Financial Impact Summary
These estimates of direct financial impact to the City are based on preliminary
information from Coburn Development on the conceptual design of the project. They
apply standard City of Fort Collins taxes and fees.
Staff has not included any tax increment flowing to the Downtown Development
Authority, nor did we assume increases in sales or property tax flowing to the city as a
result of residents' spending.
Sale of Property $1,624,000
Interest @ 7% 105,721
Less assumed investment income @ 5% <75,514>
on full sale price
Net 30,207
City permit and plan check fees 125,363
City tax 366,128
County tax 97,634
Impact fees 1,264,927
Total $3,508,259