CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: July 1, 2009
SUBJECT/TITLE: Approval of Resolution No. 09-R-19; Acquisition of State Properties on East Gaines Street Through Lease/Purchase Agreement
TARGET ISSUE: Economic Development
STATEMENT OF ISSUE
The Florida Department of Environmental Protection has sent a “Notice of Intent to Sell/Lease Surplus State Land” to the City indicating that five properties (Bloxham, Bloxham Annex, Firestone, Fuller Warren, and Winchester Buildings) are available for sale and/or lease through the State lands disposition process (Attachment 2). Two of these properties, the Bloxham Annex and the Firestone Building, are of interest to the City due to their potential as redevelopment sites, as they are adjacent to the future Cascades Park.
The State property disposition process allows State agencies, counties and cities (in this priority order) the first opportunity to acquire State property before it is advertised for sale. For the City to exercise this option, it must adopt a resolution within forty (40) days of notice indicating its interest to acquire the property. While the resolution is necessary to meet the statutory requirements for disposal of State lands, it does not constitute a legally binding obligation for the City to acquire the property.
In our discussions with the Florida Department of Environmental Protection, they have indicated that the State may be willing to execute a lease purchase agreement for these two properties. The proposed resolution stipulates that the City is offering to acquire the properties through a Lease/Purchase Agreement for a term of no less than three years and no more than five years. If the City exercised the purchase option, it would agree to acquire the property for the appraised value at that time.
RECOMMENDED ACTION
Approve Option 1: Adopt Resolution No 09-R-19 indicating the City’s intent to acquire the subject State-owned properties through a Lease/Purchase agreement.
FISCAL IMPACT
The resolution has no direct fiscal impact. If the City is successful in executing the lease purchase agreement, it will be responsible for annual lease payments of $300 per property and the costs for maintaining the properties. The Department of Budget and Policy has reviewed this agenda item and concurs it is consistent with budgetary guidelines.
Thomas H. Lewis, Director, Economic and Community Development
Anita Favors Thompson, City Manager
For information, please contact: Michael Parker, Assistant Director 891-6457
SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES
In 2005, the City participated in a community-based coalition that was formed to evaluate the impact of the proposed sale of a number of State-owned properties in the downtown area. The primary goal of the group was to try and ensure that strategic State holdings were not disposed of in a way that might hamper the community’s overall goals for downtown redevelopment. Through that effort several strategic properties were identified, and the City subsequently acquired two of those sites (the Johns Building and the Chevron Block). Several other properties, the Firestone Building, the Bloxham Annex and the Bloxham Building, were also identified as parcels that could facilitate redevelopment. The School Board had an interest in the Bloxham Building as a possible location for a downtown school. The Firestone and Bloxham Annex Buildings were seen as prime redevelopment sites to complement the development of Cascades Park. At that time the State decided to only make the Johns Building and Chevron Block parcels available for acquisition.
The Florida Department of Environmental Protection (DEP) has sent a “Notice of Intent to Sell/Lease Surplus State Land” to the City indicating that five properties (Bloxham, Bloxham Annex, Firestone, Fuller Warren, and Winchester Buildings) are available for sale and/or lease through the State lands disposition process (Attachment 2).
The State property disposition process allows State agencies, counties and cities (in this priority order) the first opportunity to acquire State property before it is advertised for sale. For the City to exercise this option, it must adopt a resolution within forty (40) days of notice by the State, indicating its interest to acquire the property. While the resolution is necessary to meet the statutory requirements for disposal of State lands it does not constitute a legally binding obligation for the City to acquire the property.
The State has not completed an appraisal of the properties and the required purchase price is unknown at this time. The acquisition price will be determined at the time a purchase agreement is authorized or if the property is advertised for sale. In our discussions with representatives from the Department of Environmental Protection, there is an indication that the State might be willing to accept a lease/purchase agreement as an alternative to a requirement to purchase immediately. However, this option will not be considered if the City does not respond within the required time period.
The lease terms that are proposed in the Resolution specify that:
1. The Lease Purchase Agreement would be for a period of no less than three years and no more than five years.
2. The annual lease payments will be $300 per parcel.
3. The City could exercise the option to purchase the property anytime during the lease term.
4. The purchase price of the property would be the appraised value of the property at the time of purchase.
If the State accepts the City’s offer, then a lease agreement will be developed which will identify all terms and conditions. This agreement would be brought back to the City Commission for approval and would also have to be approved by the State.
As referenced earlier, State agencies, including colleges and universities, have priority in the property disposition process. Florida State University (FSU) has provided a notice to the DEP indicating that they have an interest in leasing the Firestone, Bloxham Annex, Winchester and Warren Buildings. If FSU determines it will lease the Firestone and Bloxham Annex Buildings, they will not be available for lease or sale to the City.
The proposed action will provide an opportunity for the City’s offer to be considered by the State in the event FSU does chose to lease the subject buildings.
CHARITABLE CONTRIBUTIONS
N/A
OPTIONS
Option 1: Adopt Resolution No 09-R-19 indicating the City’s intent to acquire the subject State-owned properties through a lease/purchase agreement.
Pros
o Allows the City’s lease/purchase proposal to be considered by the State.
o Provides the City an opportunity to facilitate the redevelopment of properties that are important to the overall redevelopment of the downtown.Con
o If the lease purchase agreement is executed, it requires the City to make annual lease payments of $300 per parcel and assume the costs associated with maintaining the properties.
Option 2: Do not adopt Resolution No. 09-R-19.
Pro
o If the lease purchase agreement is executed, it requires the City to make annual lease payments of $300 per parcel and assume the costs associated with maintaining the properties.Cons
o Does not allow the City’s lease/purchase proposal to be considered by the State.
o Does not give the City an opportunity to participate in the redevelopment of these strategic parcels adjacent to the future Cascades Park.
ATTACHMENTS/REFERENCES
Attachment 1: Resolution 09-R-19
Attachment 2: Notice from DEP
Attachment 3: Map