Consideration and Adoption of Resolution No. 2015-16 :  A resolution of the Council of the City of Flagstaff, Arizona, memorializing direction for staff to bring an ordinance for consideration providing eight acres of land on McMillan Mesa to the Arizona Department of Veterans' Services (AZDVS)for use as a skilled nursing facility to serve veterans.

The Resolution provides direction to staff regarding the potential donation of City-owned land on McMillan Mesa to the AZDVS.  The donation  of the land is the first in a series of steps intended to result in the development and operation of a sixty (60) bed AZDVS skilled nursing facility for veterans.

The area under consideration is an eight acre portion of a large parcel of land owned by the City of Flagstaff near the intersection of Gemini Drive and Cedar Avenue.  The space is currently being used for materials storage.  On the north end it is near the APS substation and on the south end it is bounded by an APS easement.  The east boundary is along an urban trail and the west is bounded by the Gemini Drive Right of Way.   It is currently zoned as residential property and would need a conditional use permit to be approved before AZDVS could construct and operate the facility.  In the Regional Plan, it has an open designation.

The potential disposition of this and the surrounding area has been discussed by City Council many  times over the past sixty (60) years.  There have been conversations and actions considered regarding its use for open space, recreation, sale for development and other opportunities.   As a part of the current discussion staff has held public meetings and has presented to the Parks and Recreation Commission and the Open Spaces Commission since this use is not consistent with plans they had approved previously.  Both those bodies approve of the potential use of the land for a skilled nursing facility for veterans.
 

Should Council choose to approve the Resolution, the land would be donated to the AZDVS by ordinance with a recapture provision which would require ownership to transfer back to the City if the property was not under design or construction within a prescribed period of time.  If the donation is completed, the next steps will be to request funding from the State of Arizona and the Federal government consistent with how this model has functioned in Phoenix, Tucson and is in process in Yuma.
 

The largest financial impact in the donation is the value of the land.  The appraisal is currently underway.  However, based on a review of previous and currently open transactions, the cost could be estimated as between $3.25 million and $4.5 million dollars.  There will also be some administrative costs to the City for the completion of the donation including appraisal fees and survey work. 

COUNCIL GOALS:
3) Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics.

City Council provided staff direction in a recent work session to explore the details of the potential donation and come back for formal consideration.  There have been no Council actions on this particular item although there has been a long history of discussion of the use of this land.

1) Approve the Resolution and memorialize the direction to donate the land to the ADVS for use providing a skilled nursing facility. Pro: This provides the first critical step in the model used in previous projects and will put Flagstaff in line for a facility to serve veterans.  Cons:  The land has monetary value and value to the community and its donation will trade those values for the possible veterans home.

2) Not approve the Resolution and direct staff to perform a formal procurement process intended to identify alternative locations.
Pros:  May result in an alternative location that has lower value.  Cons:  The action would delay the process, could possibly result in a loss of the opportunity, and if the City sold the land under consideration to pay for the additional property it could result in development on the land regardless.

3) Not approve the Resolution.  Pros: Preserves the land for future use.  Cons: Prevents the possible development of a skilled nursing facility for veterans.   

As discussed in previous work sessions, the potential skilled nursing facility will be owned and operated by AZDVS and will potentially provide sixty (60) beds and eighty (80) jobs in Flagstaff.  It will provide skilled care to veterans from the area and there is currently no other AZDVS facility north of Phoenix.  The City's contribution is exclusively the land and there will be no additional cost to the city for development or operations.  The City will not have control over the development or operations of the facility.

The property is currently impacted by its use as a materials yard and is relatively flat and developable.  There is construction currently underway on private land to the west across Gemini Drive and additional development planned for the area.  The City has significant acreage in the area.

The donation of the land begins a process which is intended to provide an AZDVS operated veterans' home with no additional City contribution.

The land has significant value both financially and in relation to other community goals.

The land will be donated with a provision that it be recaptured if the necessary state and federal funding does not materialize or the project is cancelled for some other reason.

There are other parcels of City owned land that have been reviewed, however this is the parcel the Department of Veterans Services identified as most appropriate for the facility.

In all public outreach there has been broad support for the development of a veterans' home.  There have been some who would prefer it in a different location, but the majority of those who offered comment have approved of the donation of this land for this purpose. 
 

The highest benefit would be in providing a skilled nursing facility for veterans from Northern Arizona with no additional cost or requirements to the City.  Additionally, the project will create jobs in the community.

Consult