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Item 1.E.
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| City Council Regular | |
| Date: | 03/24/2025 |
| Title: | Sale of Park 1 Ground Retail Space |
| Presented by: | John Caterino, Facilities Manager |
| Department: | City Hall Administration |
| Presentation: | No |
| Legal Review: | Yes |
| Project Number: | N/A |
RECOMMENDATION
Staff recommends that Council approve a Purchase and Sale Agreement to sell the ground level retail space of Park 1 to TD Properties and/or assigns, for $991,300.00 with the following contingencies: (1) Council approval, (2) due diligence inspections, (3) approval and due recording of Condo Declaration and Bylaws
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
On 12/07/2022 City of Billings signed a contract with NAI Business Properties with Matt Robertson acting as supervising broker for this transaction.
On 11/14/2022 a public hearing was held, and Council approved resolution 22-11083 authorizing City staff to advertise the sale and disposal of Park 1 ground retail space on 3rd Ave N. The resolution is attached for reference.
On 9/25/2023 a Purchase and Sale Agreement was brought to Council and Staff recommend that Council reject the offer due to the negotiated sale price being below market value. The memo is attached for reference. At the time Council rejected this offer there were two unleased Units, which have subsequently been Leased. With the move of the Crime Prevention Center to new City Hall there is currently one unleased Unit.
On 01/21/2025 NAI presented to City an offer from TD Properties and/or assigns to purchase the Subject Property. Since that date, both parties have negotiated the details of the attached Purchase and Sale Agreement. The Purchase and Sale Agreement was drafted by NAI and reviewed by Moulton Bellingham.
On 12/9/2024 Council approved the Condo Declaration and Bylaws for the Subject Property. The City Clerk’s office has submitted to the County Clerk’s office the signed Condo Declaration and Bylaws and is waiting for copies of final recorded documents. The memo is attached for reference.
Park 1 is also described as BILLINGS ORIGINAL TOWNSITE, S03, T01 S, R26 E, BLOCK 56, LOT 7 - 17, LTS 7-17 & 200 X 100' VAC ALLEY ADJ TO LTS 9-16 BLK 56 BILLINGS ORIGINAL TOWN (I-140,I-684,I-649,I-78B,I-650 & I-651) in the City of Billings, Yellowstone County, Montana, according to the official plat on file in the office of the Clerk and Recorder of said County.
The Subject Property known as Park 1 is addressed as 2912 3rd Ave N. and consists of approximately 16,044 square feet of commercial retail space located on the ground level and the remainder of the approximately 149,976 square feet being a parking garage. A previously approved motion of a Condominium Declaration separated the property into three separate units:
On 11/14/2022 a public hearing was held, and Council approved resolution 22-11083 authorizing City staff to advertise the sale and disposal of Park 1 ground retail space on 3rd Ave N. The resolution is attached for reference.
On 9/25/2023 a Purchase and Sale Agreement was brought to Council and Staff recommend that Council reject the offer due to the negotiated sale price being below market value. The memo is attached for reference. At the time Council rejected this offer there were two unleased Units, which have subsequently been Leased. With the move of the Crime Prevention Center to new City Hall there is currently one unleased Unit.
On 01/21/2025 NAI presented to City an offer from TD Properties and/or assigns to purchase the Subject Property. Since that date, both parties have negotiated the details of the attached Purchase and Sale Agreement. The Purchase and Sale Agreement was drafted by NAI and reviewed by Moulton Bellingham.
On 12/9/2024 Council approved the Condo Declaration and Bylaws for the Subject Property. The City Clerk’s office has submitted to the County Clerk’s office the signed Condo Declaration and Bylaws and is waiting for copies of final recorded documents. The memo is attached for reference.
Park 1 is also described as BILLINGS ORIGINAL TOWNSITE, S03, T01 S, R26 E, BLOCK 56, LOT 7 - 17, LTS 7-17 & 200 X 100' VAC ALLEY ADJ TO LTS 9-16 BLK 56 BILLINGS ORIGINAL TOWN (I-140,I-684,I-649,I-78B,I-650 & I-651) in the City of Billings, Yellowstone County, Montana, according to the official plat on file in the office of the Clerk and Recorder of said County.
The Subject Property known as Park 1 is addressed as 2912 3rd Ave N. and consists of approximately 16,044 square feet of commercial retail space located on the ground level and the remainder of the approximately 149,976 square feet being a parking garage. A previously approved motion of a Condominium Declaration separated the property into three separate units:
(1) Parking Garage and related support spaces - To be retained by City
(2) East Ground Level Condo - Approximately 8,757 contiguous square feet and contains four (4) suites
(3) West Ground Level Condo - Approximately 7,287 contiguous square feet and contains two (2) suites
(2) East Ground Level Condo - Approximately 8,757 contiguous square feet and contains four (4) suites
(3) West Ground Level Condo - Approximately 7,287 contiguous square feet and contains two (2) suites
STAKEHOLDERS
City:
· City Council as approving body
· Facilities Division as Landlord to Tenants of retail space
· Parking Division as Landlord of parking garage
External Parties:
· Facilities Division as Landlord to Tenants of retail space
· Parking Division as Landlord of parking garage
· Bryce Burke with Moulton Bellingham
· Matt Roberston with NAI Business Properties
· Park 1 Tenants (Budget Instant Print, Self Help Law Center, DaKava House, Little Llama Learners, Volunteers of America)
· TD Properties and/or assigns as buyer of Subject Property
· Matt Roberston with NAI Business Properties
· Park 1 Tenants (Budget Instant Print, Self Help Law Center, DaKava House, Little Llama Learners, Volunteers of America)
· TD Properties and/or assigns as buyer of Subject Property
ALTERNATIVES
City Council may:
- Approve to enter into a Purchase and Sale Agreement with TD Properties and/or assigns, Inc., or,
- Not Approve and provide further direction
FISCAL EFFECTS
The original purchase price offer was $956,000.00 and the negotiated purchase price is $991,300.00
Buyer has requested a rent guarantee for the recently vacated Crime Prevention Center at a rate of $10.00/PSF/YR for a period of one year or less if leased sooner. Total potential obligation is $41,790.
The funds from the sale of the Subject Property will be used to offset construction costs for New City Hall.
Costs to City associated with sale of subject Property will include closing, condo'ing, legal fees, and broker fees. Total costs for these services are estimated to be about $50,000.00.
Assuming sale of subject Property coupled with broker fees and rent guarantee the net sale price to City is estimated to be $900,000.00.
Buyer has requested a rent guarantee for the recently vacated Crime Prevention Center at a rate of $10.00/PSF/YR for a period of one year or less if leased sooner. Total potential obligation is $41,790.
The funds from the sale of the Subject Property will be used to offset construction costs for New City Hall.
Costs to City associated with sale of subject Property will include closing, condo'ing, legal fees, and broker fees. Total costs for these services are estimated to be about $50,000.00.
Assuming sale of subject Property coupled with broker fees and rent guarantee the net sale price to City is estimated to be $900,000.00.
Attachments
- Park 1 Resolution
- Park 1 PSA Memo 9/25/2023
- Park 1 Condo Declaration and Bylaws Memo 12/9/2024
- Park 1 PSA - TD Properties