Item B - ORI/Sears Sales Terms - Laserfiche WebLink

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Policy 14 Development shall be required to pay the full cost of extending infrastructure and services, except that the City will examine ways to subsidize the costs of providing infrastructure or offer other incentives that support higher-density infill, mixed use, and redevelopment. Policy 16 Focus efforts to diversify the local economy and provide family-wage jobs principally by supporting local, and environmentally sensitive businesses. Direct available financial and regulatory incentives to support these efforts. Council Goals The fo/lowing adopted Council Goals relate to the OR]project: Sustainable Community Development: A community that retains a high quality of life and a healthy economy, effectively links land use and transportation planning, and successfully manages growth and change in the urban environment. Healthy Natural and Built Environment: A community that conserves and enhances the natural environment and provides an attractive and healthy place to live. Financial and/or Resource Considerations The Library financing plan included $550,000 in anticipated proceeds from the sale of the Sears building as one of the sources of funding. The council agreed to guarantee a minimum sale price of $550,000 for the Sears site, pending a future action regarding disposition of the property. On Supplemental Budget #2 in FY00 (March 13, 2000), the council authorized the first transfer to guarantee the minimum purchase price. The resource used to finance the guarantee was the marginal property tax exception value for FY00. The full amount of the marginal property tax exception value was transferred in FY00 ($416,536) and an additional $133,464 was transferred in the FY01 Adopted Budget to bring the total to $550,000. On Supplemental Budget #1 in FY04, the council authorized the URA to transfer $550,000 back to the City to repay the Sears building guarantee. The funds were placed into the Facility Reserve. As a result, when the URA sells the building, the sales proceeds will remain in the agency's funds. Other Background Information The site under consideration includes the 1/4-block Sears building property, along with the 1/8-block surface parking lot on the northwest corner of 10th and Olive (the other half of the surface parking on l0th and Olive is owned by an adjacent private property). The URA purchased the Sears property in 1993. Acquisition cost of approximately $900,000 included the Sears building property, and the half- block on which the new library was constructed. The primary terms for the URA's sale of the property to ORI include a purchase price of $400,000, with the URA responsible for demolition of the Sears building. Demolition estimates range from $227,000 - $250,000. The URA would also be obligated to reduce the purchase price (by a maximum of $35,000) in order to participate in the cost of an environmental assessment. Other commitments include the City offering no less than 200 parking spaces within the parking system (subject to availability), provided with a bulk purchase discount. There is currently sufficient availability of parking within the system, and a commitment from ORI to purchase spaces not currently utilized would be beneficial to the Parking Fund. The discount provided for bulk purchase has generally been 20% with an additional 10% bonus for implementation of an active alternative modes program. The council discussed the elimination of L:\CMO\2004 Council Agendas\M040623\S040623B.doc