Item 7: Disposition of Surplus Real Property

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Action: Disposition of Surplus Real Property Meeting Date: January 23, 2012 Agenda Item Number: 7 Department: Planning & Development Staff Contact: Denny Braud www.eugene-or.gov Contact Telephone Number: 541-682-5536 ISSUE STATEMENT An offer to purchase the City-owned surplus real property located at 901 Franklin Boulevard has been received. The council is being asked to approve the disposition of the property BACKGROUND The City of Eugene owns the commercial (C-2) property located at 901 Franklin Boulevard (see Attachment A map) which is no longer needed for public purpose and is therefore eligible to become surplus and sold. The property (approximately 0.95 acres) was acquired in 1992 for the planned access right-of-way for the Riverfront Research Park. The property was partitioned in 2006, to create two parcels. The east parcel is being retained for future right-of-way. The west parcel is surplus property that is not needed. The property improvements were demolished in 2009, following a fire that resulted in significant damage to the structures. The property is currently used as a surface parking lot. Based on interest that was being expressed for the purchase of the property in early 2011, the property was actively marketed through the City’s real estate management contractor, Pacific Real Estate, to gauge and broaden interest in the site. The market value of the property has been determined to be $900,000. The primary objective for selling the property is maximization of the sales price relative to market value. The City has received a formal, signed Purchase and Sale Agreement offer in the amount of $715,000 ($17.31/sqft) from Thomas Fox Properties, LLC, a developer of retail properties with offices in Medford, Oregon and Salt Lake City, Utah. (The original offer of $677,000 was rejected and a counter offer of $715,000 has been accepted subject to council approval). They have indicated plans to construct two retail restaurants on the site. The Purchase and Sale Agreement requires a $10,000 earnest money deposit due upon City Council approval of the sale, and includes a 120-day due diligence period prior to closing. The due diligence period can be extended an additional 60 days if the buyer has submitted for building permits. The Purchase and Sale Agreement includes a seller contingency that the council must approve the sale of the property. Section 2.872 of the Eugene Code provides that a proposal for the sale of property that is acceptable to the City Manager shall be presented to the council for approval. The proposed sale would net approximately $700,000 after closing costs. S:\CMO\2012 Council Agendas\M120123\S1201237.doc