At the February 14, 2011 meeting, the City Council considered the Community Development Board's recommendation to donate lots 9-12, block 142 Original Townsite of Billings to RiverStone Health.  The property is located on the southwest corner of 1st Avenue South and S. 25th Street and contains14, 000 sq. ft.  The Council rejected the recomendation and directed staff to post and advertise the property for sale and to return the item to the Council at the June 27, 2011 meeting.  Staff completed the Council's instructions and received three (3) offers for the property:

• Montana Rescue Mission         $70,005
• Tom and Sherlene O'Dea        $40,000
• RiverStone Health                   $70,000

The Council should conduct a public hearing regarding the property's sale and consider selling the property to one of the offerors or direct staff to retain the property in the city's land inventory. 

Staff recommends that the Council sell the property to RiverStone Health for the offered amount.  RiverStone Health has shown its commitment to this location on 1st Avenue South by its recent building expansion, it owns adjacent vacant property, has a vested interest in maintaining this property until it is ready to develop and it offered a recent appraisal value of $5/sq. ft.  The Montana Rescue Mission also owns adjacent vacant property but has no other presence in the vicinity.  It controlled this property for five (5) years and was unable to develop it during that time despite receiving the property as a City donation.  Its offer is $5 more than RiverStone's, so there is essentially no lost revenue if the Council declines to sell the property to the Rescue Mission.  The high offers are from tax exempt entities, so the vacant and/or improved properties will not generat tax revenue for the City.  The O'Dea's offer is substantially below the others but the property would be taxable.  The O'Dea's did not disclose development plans. 

Selling property is discretionary, so the City Council may choose to sell the property to any of the offerers or may decline the offers and retain the property.

The property was exchanged for other property that was acquired with Community Development Block Grant funds.  The Council traditionally allows the purchasing or managing department to retain the sale proceeds, so unless directed otherwise, the Community Development Division will receive the funds.

Staff recommends that the City Council conduct a public hearing and sell lots 9-12 block 142 OTB to RiverStone Health for their offer of $70,000.