The City owns lots 9-12, block 142 of the Original Town of Billings.  These are four (4) vacant lots that are located on the southwest corner of 1st Ave. South and S. 25th Street.  The City received these lots in a land exchange among the City, County and RiverStone Health.  The lots that the City traded were acquired with Community Development Block Grant funding, so lots 9-12 are considered to have been purchased using that source of funding.  The City donated these lots to the Montana Rescue Mission in 2005 but they reverted to the City in 2010 because the Mission didn't develop the property as the donation required.  RiverStone Health recently expressed its desire to obtain the property.  On January 14, 2011, the City Council approved a Resolution of Intent to convey these lots and to conduct a public hearing on February 14, 2011.  The notice of public hearing was advertised twice in the Billings Times and all property owners within 300' received the same notice.  The property was also advertised for sale in the Billings Gazette.  Staff is requesting that the City Council conduct the public hearing and consider transferring the property to RiverStone Health.

The Council may:

• Approve the recommended transfer.  There are several available alternatives that will determine the financial impact.  The alternatives and the resulting financial impacts are described below.
• Reject the recommended transfer.  The Council would need to provide further guidance to staff, such as whether to retain the property or whether to re-advertise the property for sale in order to elicit offers from other potential purchasers.

Transferring the property will have a financial impact but the amount of impact is determined by the alternative that Council selects.  

• The Council could retain the property and there will be minor property maintenance costs such as for mowing and sidewalk snow removal.
• The Council could donate the property to RiverStone Health.  The property was acquired through a property exchange and the City property that it traded was purchased with CDBG funds.  Therefore, staff treated this property as though CDBG purchased it.  Staff consulted the Community Development Board about the sale and price.  The Board met on January 4th and voted to recommend that the Council donate the property to RiverStone Health for future expansion but the City should retain a first right of refusal to reacquire the property in the event that RiverStone does not develop the property and attempts to sell it to another person or business.  RiverStone Health may be willing to accept this condition if the land is donated, but is not likely to agree to it if the Council requires that RiverStone buy the property.
• The Council could sell the property to RiverStone Health.  The property that the City traded for these lots cost $30,000, which equals about $2.14/sq. ft.  The City's customary price for south side property is $2.50/sq. ft.  That produces a total sale price of $35,000.  Hamwey Realty performed a market analysis and recommends a value of $5/sq. ft., or a total price of $70,000.  Since the original purchase source was CDBG, staff recommends that any proceeds be returned to Community Development and designated as program income.  

The Community Development Board recommends that the City Council donate the property to RiverStone Health with a first right of refusal to reacquire the property in the event that RiverStone does not develop the property for its campus (allows it to remain vacant and unimproved) and if it wishes to sell or donate the property to another person or entity.