9.A.
City Council Meeting - FINAL
- Meeting Date:
- 03/05/2024
- Co-Submitter:
- Anja Wendel
- From:
- Bryce Doty, Real Estate Manager
Information
TITLE:
Consideration of Motion to Reject all Bids: Solicitation to sell a City-owned 12.52 acre parcel located off Silver Saddle Road in Doney Park; discussion and request for direction related to disposal of both the 12.52 acre parcel and a 9.26 acre parcel
STAFF RECOMMENDED ACTION:
- Reject all bids from the 2022-126 solicitation for sale of a 12.52 acre parcel; and
- Direct staff to issue an invitation for bids for sale of a 12.52 acre parcel; and
- Direct staff to issue an invitation for bids for sale of a 9.26 acre parcel.
If desired, direct staff to list properties for sale with a commercial real estate listing agency.
Executive Summary:
The City previously owned 540 acres in Doney Park under the previous airfield known as Koch field. Ordinance No. 1772 declared the lands excess land, all of which was parceled out and sold in the early 1990's except for a 12.52-acre parcel, adjacent to Cromer Elementary School off of Silver Saddle Road (Assessor's Parcel No. 301-08-003F) and a 9.26-acre parcel just north off of Open Sky Road (Assessor Parcel No.301-08-056).
These parcels were purchased as assets by the City's self-insured trust in part to fund environmental remediation on the 9.26-acre parcel among others, a consequence of a former skeet shooting operation on the lands. City uses for these parcels are restricted in so far as that if the properties are repurposed for City use (such as housing), then the City would would need to repay the investment made by the self-insured trust. City risk management staff have wanted to divest of these properties for many years, provided at a minimum the initial investment was recouped.
The self-insurance trust fund functions to provide defense and payment of losses and claims for property, liability, unemployment compensation, worker's compensation; health, accident, life, disability or other benefits for the employees and officers of the City and their dependents; payment of insurance premiums; and risk management consultation.
An invitation for bids to sell the City-owned 12.52-acres of real property adjacent to Cromer Elementary School off of Silver Saddle Road (Assessor's Parcel No. 301-08-003F) closed on August 25, 2022. The City received one bid offering less than 15% of the appraised value. An invitation for bids was not issued for the 9.26-acre parcel in light of the low interest in the other parcel.
City staff recommends City Council formally reject this bid. Since that solicitation, other parties more recently have expressed interest in purchasing the property and transacting at the appraised value adjusted to a present day amount.
Article VIII, Section 10 of the City Charter provides that real property may be sold to the highest bidder; however, "if there are no bids submitted, then for a two-year period the City Manager may, subject to Council approval, enter into an agreement to sell the property for an amount reasonably consistent with an appraisal without further notice and bid process." As there was a bid submitted here, it is necessary to issue a new solicitation.
These parcels were purchased as assets by the City's self-insured trust in part to fund environmental remediation on the 9.26-acre parcel among others, a consequence of a former skeet shooting operation on the lands. City uses for these parcels are restricted in so far as that if the properties are repurposed for City use (such as housing), then the City would would need to repay the investment made by the self-insured trust. City risk management staff have wanted to divest of these properties for many years, provided at a minimum the initial investment was recouped.
The self-insurance trust fund functions to provide defense and payment of losses and claims for property, liability, unemployment compensation, worker's compensation; health, accident, life, disability or other benefits for the employees and officers of the City and their dependents; payment of insurance premiums; and risk management consultation.
An invitation for bids to sell the City-owned 12.52-acres of real property adjacent to Cromer Elementary School off of Silver Saddle Road (Assessor's Parcel No. 301-08-003F) closed on August 25, 2022. The City received one bid offering less than 15% of the appraised value. An invitation for bids was not issued for the 9.26-acre parcel in light of the low interest in the other parcel.
City staff recommends City Council formally reject this bid. Since that solicitation, other parties more recently have expressed interest in purchasing the property and transacting at the appraised value adjusted to a present day amount.
Article VIII, Section 10 of the City Charter provides that real property may be sold to the highest bidder; however, "if there are no bids submitted, then for a two-year period the City Manager may, subject to Council approval, enter into an agreement to sell the property for an amount reasonably consistent with an appraisal without further notice and bid process." As there was a bid submitted here, it is necessary to issue a new solicitation.
Financial Impact:
Proceeds from any sales would be directed to the self-insured trust, which reflects these properties as assets of the trust. June 28, 2021 appraisals reflected a fair market value for both parcels of $1.1 million dollars. Market conditions have improved in the area; updated appraisals will inform any sales or solicitations.
Policy Impact:
None
Connection to PBB, Carbon Neutrality Plan, 10-Year Housing Plan & Regional Plan:
Priority Based Budget Key Community Priorities and Objectives
- Maintain the organization’s fiscal stability through strong financial policies and best practices
Previous Council Decision on This:
Resolution No. 2014-04 memorialized direction to sell or trade the parcels received from City Council in a work session meeting on October 28, 2013.
Options and Alternatives:
1. Issue new invitations for bids as recommended.
2. Do not issue invitations for bids for one or both of the 12.52 and 9.26 acre parcels.
3. Consider development of the land for housing.
2. Do not issue invitations for bids for one or both of the 12.52 and 9.26 acre parcels.
3. Consider development of the land for housing.
- Per Resolution No. 2022-52, prior to disposal of real property, the City Housing Section is to consider whether or not the land is suitable for housing development. In addition, the City Council is also to consider whether a portion of sale proceeds could be applied towards housing development. Here, The City Housing Section is not interested in developing the property for housing, although the land is zoned rural residential. If the parcels are sold, sale proceeds need to be returned to the self-insured trust fund.
- The City parcels would be more valuable if rezoned; however, the City would need to incur the time and expense of applying to Coconino County for rezoning.