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HomeMy WebLinkAboutItem C: Ridgeline Acquisition Proposal from Arlie and Company ECC DR UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Ridgeline Acquisition Proposal from Arlie and Company Meeting Date: November 8, 2010 Agenda Item Number: C Department: Public Works Staff Contact: Neil Björklund www.eugene-or.gov Contact Telephone Number: 541-682-4909 ISSUE STATEMENT This item is to discuss a proposal from Arlie and Company to sell additional land to the City for a new park south of Lane Community College and to name the park after Suzanne R. Arlie. BACKGROUND In May 2008, the City purchased 200 acres from Arlie and Company to extend the Ridgeline Park system east from Mt. Baldy toward Lane Community College. This purchase was primarily funded via the 2006 Parks, Recreation and Open Space (PROS) Bond, with a portion funded via Parks Systems Development Charge (SDC) funds. A sale agreement signed on May 20, 2008, included provisions that: (1) the City shall complete a master plan for the property on or before July 1, 2010, (2) within 60 days of the City’s completion of a master plan for the area, Arlie and Company would donate $600,000 to the City or to a mutually agreed-upon 501(c)(3) tax-exempt entity, and (3) the funds could be used for any park-related purpose, with expenditures not related to the subject property being subject to approval by Arlie and Company. The City’s master plan for the site was completed on schedule and was adopted by Administrative Order on June 25, 2010. The 60-day period for Arlie to make its donation has passed, and Arlie was unable to make that donation due to the company entering Chapter 11 bankruptcy proceedings. Arlie and Company contacted the Parks and Open Space Division in April 2010 indicating an interest in selling additional land to the city adjacent to the land acquired in 2008. At a June 14, 2010, City Council work session, the City Manager was asked to bring back information relating to the proposed acquisition and options for funding the acquisition On June 28, 2010, the Parks and Open Space Division signed a non-binding letter of intent with Arlie and Company indicating interest in acquiring additional land south of Lane Community College, contiguous with the land acquired from Arlie in 2008. The letter of intent was needed prior to July 31, 2010, in order to maintain the possibility of a sale and donation by ensuring the proposal would be considered as part of the Chapter 11 reorganization process. On October 8, 2010, Arlie staff informed Parks and Open Space staff that the bankruptcy court had approved the sale of land as described in the letter of intent. Z:\CMO\2010 Council Agendas\M101108\S101108C.doc ANALYSIS General The Park, Recreation and Open Space Project and Priority Plan (hereafter “Project and Priority Plan”) is the City’s adopted policy document that guides future park and open space acquisition and development. The Project and Priority Plan was developed through an extensive public process over four years, and covers a planning horizon of twenty years, from 2006 through 2025. Each project is assigned a priority level of 1 through 5, with Priority 1 projects being highest priority, and generally being completed first. The creation of a community or metropolitan park east of Mt. Baldy is not among the park projects contained in the Project and Priority Plan. The acquisition of additional natural area acreage in the corridor east of Mt. Baldy could be considered consistent with a Priority 3 project in the Project and Priority Plan that says: “acquire natural areas to connect Ridgeline system east to Pisgah and Willamette River system.” On the other hand, that project could be considered to have been completed with the 2008 acquisition of 200 acres from Arlie and Company. Since the Project and Priority Plan does not address the creation of a new community or metropolitan park in this area, the decision and policy direction to implement this project must come directly from the council. Potential Funding Sources The letter of intent referred to above sets out a proposed sale price of $1,944,000 for the 315 acres described therein. To fund a purchase of this size, capital funding sources, such as general obligation bond funds, Park Systems Development Charge (SDC) funds, stream corridor acquisition funds, where appropriate, or general capital funds, are the most likely sources of funding for acquisition of park lands. Arlie and Company has made it a requirement to close the acquisition by the end of December 2010, which precludes seeking funding from potential sources not currently in-hand (e.g., state or federal grant programs). FY11 projected revenue for Parks SDC and Parks General Capital Funds combined is $562,000. Clearly, these funds will be insufficient to fund this purchase, and spending the funds on this proposal would delay other high priority, planned projects. The remaining option is to re-allocate funds from the 2006 Parks, Recreation and Open Space bond measure. Approximately $10.2 million of the remaining 2006 Bond Measure funding is uncommitted. The specific projects listed on the ballot included “purchasing land for neighborhood and community parks in the Bethel, River Road/Santa Clara, South Eugene, Willakenzie and Willow Creek areas.” These five areas are park planning sub-areas associated with the adopted Project and Priority Plan, and the site of the Arlie acquisition proposal is mostly within the South Eugene sub-area. The informational brochure disseminated to households throughout Eugene by the City about the bond measure provided additional information about the bond measure, including five focus areas (see table below) and what would be accomplished within each category. For the acquisition of neighborhood and community parks, the brochure listed:  “13 new neighborhood park sites across Eugene. Parks site acquisitions would be targeted for the following neighborhoods: Bethel, River Road/Santa Clara, South Eugene, Willakenzie and Willow Creek.  A new community park in Santa Clara. Existing funds would be supplemented to acquire a 35-40 acre site to provide active and passive recreation opportunities. Z:\CMO\2010 Council Agendas\M101108\S101108C.doc  Expansion of existing community parks including Skinner Butte Park to preserve access to the Shelton-McMurphy-Johnson House, Amazon Park to address space limitations, and Golden Gardens Park to improve safety and recreation opportunities.” Staff has conferred with the City’s bond counsel, and confirmed that from a legal standpoint, the council has the authority to direct that $1.944 million in bond funds to purchase land for a park and open space site that was not specifically described in the ballot measure language or in the City’s informational brochure about the bond measure. The legal limitation is that the City cannot use a “bait and switch” tactic by getting voters to approve the bond measure with a promise of one or more projects that it did not intend to finance with bond proceeds. Beyond this legal issue, there may also be policy or political issues associated with changing the plan for how bond proceeds are to be spent. The following table shows the amount originally allocated to each focus area, as well as the current status and the funds remaining for each. Bond Focus Area Original Status Uncommitted Allocation Funds Remaining Acquire land for neighborhood $10,500,000  20 acres acquired for Santa $9,348,000 1 and community parks Clara Community park (20 more acres needed). In-holding at Amazon Park acquired. Negotiation to acquire land adjacent to SMJ House stalled after exhaustive efforts. One new neighborhood park acquired, and access to one future neighborhood park has improved to date. Suitable park sites with willing sellers have been extremely difficult to find within the target areas that currently lack access to neighborhood parks. Expand and develop Golden $2,000,000 Completed. $0 Gardens Park Acquire land for natural area $7,750,000  More than 370 acres of $1,695,000 parks ridgeline natural areas acquired (Bond target was 60-100 acres). Willamette River frontage yet to be acquired (30-45 acres) Gillespie Butte access improvement discussions continue with property owners (1.7 acres). Synthetic surface athletic fields $5,000,000 Four new synthetic fields $412,000 completed. Replacement of two existing synthetic fields remains. Z:\CMO\2010 Council Agendas\M101108\S101108C.doc West Eugene Wetland Education $1,750,000 On hold pending private fund $0 Center raising to match City contribution. 1 Typically, per acre costs for acquiring land for neighborhood and community parks in developed residential areas is several times higher than those for acquiring natural areas outside the city and/or UGB. Future Park Uses The land acquired from Arlie and Company in 2008 is part of the Ridgeline Park system, whose primary function is to provide passive recreational uses such as hiking, wildlife watching, and, in some areas, mountain bike riding. The Master Plan for the 2008 acquisition area was completed in June 2010, and calls for most of the area to be dedicated to passive recreation, with a system of trails. A portion of the area is designated as a site for a potential future, naturalistic disc golf course. The Parks, Recreation and Open Space Comprehensive Plan (PROS Plan) was adopted by City Council in 2006. Although the PROS Plan is not in effect as adopted land use policy due to a state remand, it provides a framework for distinguishing the different types of parks and their intended purposes and uses. Community Parks are intended to draw users from a two-mile radius, and to include facilities such as: Neighborhood park components, including children’s play areas, and basketball courts Reservable picnic areas Performance and gathering spaces Restrooms Soccer and softball/baseball fields Paved pathways and trails Natural areas Off-street parking, transit access and bike parking. A second park type of a similar, regional nature described in the PROS Plan is the Metropolitan Park, which is intended to “preserve unique cultural and natural areas or to provide features, facilities and events that attract users from the entire Eugene-Springfield metropolitan area.” Given the location of the proposed acquisition area, its relationship to existing Ridgeline Park land, the landforms and habitat types that exist on the site (wetlands, prairie, oak savanna, mixed forest, riparian corridors, as well as disturbed areas), the site’s location outside the Urban Growth Boundary, and the character of surrounding properties, this site appears very suitable for a Metropolitan Park, whose purpose would be to protect a unique community resource, while also providing a unique opportunity to serve currently unmet needs for active trail uses including mountain bike trails, mountain biking skills facilities, as well as disc golf and a variety of passive recreational uses. Mountain bike trail riding and disc golf are two recreational needs that are growing rapidly in the community and are significantly underserved by the current parks and open space system. This site provides unique opportunities to significantly enhance provision of services to these local recreational communities, while minimizing conflicts with or impacts to other, existing park uses and activities. Given the types of uses that would be most compatible with this site, and with the uses designated for the existing City-owned land, this site would most likely be considered a Metropolitan Park. Cost of Ongoing Maintenance Ongoing maintenance costs for this site would vary, depending upon how the site is developed. Annual maintenance costs would be lower while the site is land-banked site for future development; however, costs would rise after new features and amenities are developed. At a City Council work session on Z:\CMO\2010 Council Agendas\M101108\S101108C.doc October 11, 2010, Parks and Open Space Division staff presented information on annual operations and maintenance costs (O & M costs) and needs. As part of that presentation, the council was informed that, at present, the City is spending $111 per acre in maintaining natural area sites in the ridgeline system, which is insufficient to keep these areas from declining in quality. To sustain these sites over time, the City would need $325 per acre annually to keep these sites from declining. In the table below, these two figures are shown as applied to the proposed 315 acre acquisition area. Short-term Status of Site Annual O&M Acres Total Annual Cost per Acre O&M Cost 1. In the near term, site is land-banked $111 315 $34,965 and maintained at the current level 2. In the near term, site is land-banked $325 315 $102,375 and maintained at a sustainable level The highest ongoing maintenance costs would be associated with development of a fully developed community park, with typical community park features as described above. In order to calculate the ongoing O & M costs for the new park, the number, size and type of features within the developed park would need to be known. Since those details are unknown at this point, staff can only provide examples to illustrate the range of costs implied by different development options. Long-term Status of Site Estimated Total Annual O&M Cost Example #1: In the long run, site is rehabilitated $127,000/year and developed only with 2.5 miles of trails Example #2: In the long run, site is rehabilitated $183,000/year and developed as a Metropolitan Park with a system of 5 miles of trails, a 3-acre mountain bike skills facility and a 18-acre disc golf course Example #3: In the long run, 40 acres of site are $868,000/year developed as a Community Park with high intensity sports facilities, playground, etc., and the remainder is rehabilitated as natural area with 5 miles of trails, a 3-acre mountain bike skills facility, and an 18-acre disc golf course Cost of Park Development The total cost of developing a new 515-acre park would vary widely depending upon the specific features included within the park. As with calculating ongoing O & M costs, the number, type and size of all the developed features in the park would need to be known. Using the same three examples used for ongoing O & M costs above, the following table provides examples of potential development costs. Long-term Status of Site Estimated Park Development Cost Example #1: In the long run, site is rehabilitated $1,200,000 and developed only with 2.5 miles of trails Example #2: In the long run, site is rehabilitated $1,700,000 and developed as a Metropolitan Park with a system of 5 miles of trails, a 3-acre mountain bike skills facility and a 18-acre disc golf course. Z:\CMO\2010 Council Agendas\M101108\S101108C.doc Example #3: In the long run, 40 acres of site are $6,400,000 developed as a Community Park with high intensity sports facilities, playground, etc., and the remainder is rehabilitated as natural area with 5 miles of trails, a 3-acre mountain bike skills facility, and an 18-acre disc golf course Trade-Offs Assuming that the most viable funding source is reallocating funds from the 2006 PROS Bond, the primary trade-off in considering this proposed acquisition would be that it would reduce funding for other capital projects previously identified in the bond package. Given the level of difficulty staff has encountered in attempting to find suitable land with willing sellers within each of the 13 areas targeted for new neighborhood parks, it is possible that staff will ultimately be unable to expend all of the funds identified for those neighborhood parks. Another consideration is the comparison of the ongoing annual operations and maintenance costs of the proposed new neighborhood parks compared to the operations and maintenance costs of the proposed new Suzanne R. Arlie Park. This comparison cannot be made until it is clear what type of park would be created, what types of facilities would be developed, and how many neighborhood parks of what size would not be constructed. Park Naming On September 27, 2010, a new naming policy was adopted by the council for facilities owned by the City, including parks. Under this new policy, authority for legal naming of entire City-owned parks rests with the City Council: “The establishment of formal legal names of permanent real property owned by the City of Eugene, including parks, requires legislative action and cannot be accomplished through administrative action. Only the Eugene City Council retains the authority to carry out legislative action to establish legal names. Features or distinct areas within parks, however, such as picnic structures or gardens, can be named through administrative action.” Arlie and Company has indicated that naming the park after Suzanne R. Arlie is a requirement of the transaction. In Section 5, Appendix A, the council’s new naming policy states that if the appraised value of the total area is $500,000 or greater and the donated portion is at least 51% of the total area, the park can be named after the donor or their designee. The area that Arlie has proposed to be named after Suzanne Arlie includes the 200 acres acquired in 2008, plus the approximately 315 acres in the present proposal. Acquisition Appraised Donation Amount Acres Acquired Equivalent Percent Value Donated Area 2 Acres Donated 2008 $3,000,000 $0 200 0 0% acquisition 2010 $3,434,000 1 $1,489,800 315 209 65% proposed (discount) acquisition $ 600,000 (cash donation) Total $6,434,000 $2,089,800 515 209 41% Z:\CMO\2010 Council Agendas\M101108\S101108C.doc 1 This appraisal was completed in 2008, and Arlie has indicated it does not have an updated appraisal available at this time. 2 This was calculated by dividing the total donation amount by the appraised value per acre for land south of the existing ridgeline park. If a portion of the total donation amount was applied to the land north of the existing park, the percentage would be lower. In the May 2008 sale agreement, Arlie proposed a trail connection easement running north to Lane Community College, which would comprise about six acres. If this easement area was treated as a 100- percent donation and included in the calculation above, the revised total of 215 donated acres out of 521 total acres would constitute just over 41% of the total proposed park area. Since the donated acreage within the area proposed to be named does not comprise more than 51% of the total area, this proposal would not meet the threshold for naming the park after a donor, as stated in Section 5, Appendix A, of the council’s naming policy. However, the policy does have other provisions that could be applied in this case, including a provision that allows that: “Park land and features may be named to honor a living person whose gift or service to the community is of a most extraordinary nature.” As shown in the table above, Arlie and Company is proposing a total donation of more than $2 million to the City for the creation of this park, which could be viewed as a gift of an extraordinary nature. Timing and Negotiable Items Arlie and Company has provided information to the City indicating that, due to the decisions of the bankruptcy court, the acquisition transaction would have to be completed no later than December 31, 2010. With this required timeframe, and the requirement that any changes to the price per acre or any substantial change to the number of acres would have to be approved by the bankruptcy court, there will not be sufficient time further to negotiate either of these items (i.e., the purchase price or significant changes in acreage) and still get court approval. Arlie and Company has indicated (see attached memo dated October 19, 2010) that only a very minor change in the number or location of the acres acquired would be negotiable under the terms approved by the bankruptcy court. The general provisions of the council’s naming policy require that the process for assigning a legal name to a City-owned facility include an opportunity for public comment. The policy does not specify the length of the comment period. If the council were to direct the City Manager to proceed with the acquisition, it would need to either waive the public comment period, or initiate the public comment period such that the comments could be gathered and reviewed by the council, and the final naming decision made with sufficient time for the acquisition to close on or before December 31, 2010. RELATED CITY POLICIES As discussed in the section above, the City Council has adopted a naming policy for facilities owned by the City, including parks. The Parks, Recreation and Open Space Project and Priority Plan, adopted by the council in 2006, does not directly address this proposed acquisition. The most closely-related direction is a Priority 3 Project to “Acquire natural areas to connect Ridgeline system east to Pisgah and Willamette River system.” Although this proposed sale would add land to the south of existing City ridgeline park land, creating a wider connection to the east, it would not extend it any further to the east. There is no existing policy direction that calls for establishment of a community or metropolitan park in the subject area. Z:\CMO\2010 Council Agendas\M101108\S101108C.doc COUNCIL OPTIONS The City Council is requested to provide direction to staff regarding how to respond to the Arlie proposal. Options include: A.Purchase the approximately 315 acres as shown on Attachment A and as detailed in the letter of intent included as Attachment B, contingent upon inclusion of the $600,000 donation previously agreed to, (2) use proceeds from the 2006 Parks, Athletic Fields and Preservation of Open Space bond measure to purchase the property; and (3) initiate the public comment period on the proposal to name the park after Suzanne R. Arlie such that there is sufficient time for a final naming decision to allow the acquisition to close on or before December 31, 2010. B.Purchase the approximately 315 acres as shown on Attachment A and as detailed in the letter of intent included as Attachment B, contingent upon inclusion of the $600,000 donation previously agreed to, (2) use proceeds from the 2006 Parks, Athletic Fields and Preservation of Open Space bond measure to purchase the property; and (3) waive the public comment period for the naming process and name the park after Suzanne R. Arlie. C.Not pursue purchase of the property as shown in Attachment A. D. Other, as directed by the council. For either option A or B, funding of ongoing maintenance will be considered as part of the continued overall Parks and Recreation O & M funding discussion. CITY MANAGER’S RECOMMENDATION If the council chooses to pursue purchase of the property, the City Manager recommends Option A. SUGGESTED MOTION None. ATTACHMENTS A.Map of proposed sale area B.June 28, 2010, Letter of Intent from Eugene Parks and Open Space Division to Arlie and Company C.Memo from Arlie and Company dated October 19, 2010 D.Eugene City Council Naming Policy E.Application for Naming Facility FOR MORE INFORMATION Staff Contact: Neil Björklund, Parks and Open Space Planning Manager Telephone: 682-4909 Staff E-Mail: neil.h.bjorklund@ci.eugene.or.us Z:\CMO\2010 Council Agendas\M101108\S101108C.doc ×óë Ó Û Ó Ñ Î ß Ò Ü Ë Ó Ñ½¬±¾»® ïçô îðïð ÌÑæ Ö±¸²²§ Ó»¼´·²ô п®µ­ ¿²¼ Ѱ»² Ͱ¿½» Ü·®»½¬±® Ò»·´ Þ¶±®µ´«²¼ô п®µ­ д¿²²·²¹ Ó¿²¿¹»® ÚÎÑÓæ Ì»®»­¿ Þ·­¸±©ô д¿²²·²¹ Ü·®»½¬±® ÍËÞÖÛÝÌæ Ý×ÌÇ ÐËÎÝØßÍÛ ÑÚ ßÎÔ×Û ú ÝÑÓÐßÒÇ ÔßÒÜ ÚÑÎ ÐßÎÕ ßÒÜ ÑÐÛÒ ÍÐßÝÛ Ì¸·­ ³»³± ®»­°±²¼­ ¬± §±«® ®»¯«»­¬ º±® ½´¿®·º·½¿¬·±² ®»¹¿®¼·²¹æ ïòæÕÜÉÔÊÉÕØËØÑÜÉÔÎÏÊÕÔÍÛØÉÆØØÏÉÕØúÔÉÄiÊÍÈËÚÕÜÊØÎ×ÜÙÙÔÉÔÎÏÜÑÑÜÏÙ×ËÎÐüËÑÔØ ݱ³°¿²§ ¿²¼ ¬¸» üêððôððð ¼±²¿¬·±²á îòɸ¿¬ ¿­°»½¬­ ±º ¬¸» Ô»¬¬»® ±º ײ¬»²¬ øÔÑ×÷ ¼¿¬»¼ Ö«²» îèô îðïð ¿®» ²»¹±¬·¿¾´» ¿²¼ ©¸¿¬ ½¸¿²¹»­ ©±«´¼ ®»¯«·®» ¿°°®±ª¿´ ¾§ ¬¸» ËòÍò 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