Consideration and Possible Adoption of Ordinance No. 2018-24:  An ordinance of the Flagstaff City Council, authorizing the City Manager or his or her designees to acquire improved real property located at 2323 N. Walgreens Street and establishing an effective date; and  approval of a Purchase Contract with Hilton Harris Real Estate as broker for the seller of the improved real property at 2323 N. Walgreens Street and subject to the contingencies described in the contract.

City staff is requesting Council approve acquisition of real property located at 2323 N. Walgreen Street for public uses. The real property includes an 8,623 square foot building.  Staff submitted an offer to purchase the property and final sale is contingent on Council approval, appraisal, and inspections.  The primary purpose is to provide Water Services staff with office space as well as other city programs.

$1,125,000 purchase price
+       3,500 appraisal fees
+       2,000 inspection fees
+       closing costs, TBD.
$1,135,500 estimated total acquisition cost.

The Water Service division has $1.8 million budget in contingency as well as several projects they are now projecting to be under budget in FY2019 that they will utilize to cover this purchase.  If other divisions use the building, they will need to allocate funds (pay for such use) to the Water Services division.

None.

Personnel
-Attract and retain quality staff.

Invest in our People
- Ensure effective resources for employees.

 No.

1. Approve Ordinance 2018-24 and Purchase Contract.
2. Do not approve Ordinance 2018-24 and Purchase Contract, and provide direction to Staff.

An evaluation of City facilities which includes City Hall has been performed and it is determined that there is not enough office space available to house City Staff due to the demolition of the Cherry Building and White House to make way for the new Municipal Court House.  Staff has been reviewing office space for rent and it was determined that purchasing verses renting is a better use of taxpayer money.  With this purchase 2 to 3 departments may be able to share the building which will free up space at City Hall as well as alleviate the strain on parking in the downtown area.

The City staff looked at many potential properties for lease or purchase. This is the best property on the market that meets the City's needs.

The building was constructed in 1990 and believed to be in good condition. It is a total of 8,623 square feet and offers three separate office suites; a 3,522 square feet suite, a 1,993 square feet suite, a 2,077 square feet suite, a 1,031 square feet common area with kitchen, three bathrooms, two detached storage units and 46 parking spaces which include two American Disabilities Act (ADA) spaces.  City staff anticipate that the building will accommodate 10 to 15 employees per suite, approximately 30 to 45 City employees will be able to relocate into the new building.  It is anticipated that Water Services and Housing are the departments who will occupy the building, however Facilities is still evaluating which departments would be better suited at the new location.

This purchase will provide the necessary office space needed for City Staff due to the demolition of the Cherry Building and the White House building located at 101 W. Cherry Avenue which is anticipated to take place next spring to make room for the new Municipal Court House.  The demolition takes 12,000 square feet of usable office space along with 42 parking spaces and displaces 39 City Staff. The purchase of the building at 2323 N. Walgreens Street won't solve all the office space needs but will alleviate the current demand and will give the City a long term permanent solution as well as an increased presence on the east side of Flagstaff.

The Purchase Contract is a standard commercial form and has been executed by the Seller. The purchase of the building is contingent on the following.
1. Council approval and adoption of Ordinance No. 2018-24 authorizing the purchase.

2. Appraisal.  The City has received the appraisal and the property has appraised at the purchase price of $1,125,000.

3. Inspections. The City has until July 3rd to complete the desired physical inspections.

The anticipated closing date is August 15th. Estimating 30 to 60 days for renovation, which includes painting, carpeting, office partitioning.  Estimated move in date would be October-November of 2018.

1. Provide office space to City Staff.
2. Relocate many City Staff from downtown which will help with parking and traffic.

The building will require improvements estimated between $380,000 to $500,000 for updates to the faciltity, new carpet, paint, moving expenses and office partitions, etc.  City has budgeted $100,000 in FY 2019 to Housing relocation, which funds may be used toward renovation costs.

1. Alleviate parking in the downtown area.
2. Alleviate traffic in the downtown area.
3. Provide office space for City employees.
4. Allow for potential growth in City staffing.
5. East side presence.

 Inform.