Agenda - Council Work Session - 08/23/2016

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CC Work Session 2.2. Meeting Date: 08/23/2016 Information Title: Former Municipal Center Redevelopment Project, Sources and Uses of Funds Discussion Purpose/Background: PURPOSE Provide staff policy direction on the various sources/uses of funds related the old municipal center redevelopment project. The attached Sources& Uses Document is a good reference point for this case/discussion--including a staff recommendation. Staff will walk through said document at worksession. This conversation is intended to be fluid and informal--staff understands this conversation may generate additional questions and require additional conversation. BACKGROUND (redevelopment projects/history) For background information on the former municipal center redevelopment project/process,please see attached background document. Please note,the Council will be reviewing a case on tonight's agenda--related to the demolition and site clean up process. BACKGROUND (sources/uses) The former municipal center campus redevelopment project is a fairly complex project,that includes several individual projects, several council cases/discussions,various stakeholders,and has spanned over the course of four years.Now that we nearing the end of this project, staff would like to review the project budget,and the corresponding sources/uses of funds. IMPORTANT PROJECT DETAILS (1)Purchase Agreement, overview: the City entered into a purchase agreement with NIK Management/GS Land for the sale of the 21.28 acres of city owned land(former municipal center campus)in January of 2015. This agreement including two closings. The first closing took place in June of 2015,with a sale price of $616,690 for 14.86 acres. The second closing is scheduled to take place 30 days after the former municipal center site is demolished and cleaned up,with a$279,270 sale price, for 6.42 acres. (2)Purchase Agreement,proceeds:the City received a NET $581,954 from the closing of the GS Land Purchase Agreement(phase 1). Those proceeds were deposited into the City's Facilities Fund($1.44M balance). By placing these dollars into the Facilities Fund, the Council was able to accomplish a two major items. First, they were able to use these dollars to pay for up-front costs associated with the demolition and clean up process(essentially act as the project credit line). Secondly, this allowed the Council to buy some time--before they made a decision on how the proceeds would be used specifically. It should be noted--previously(2012-2014),land proceeds from the sale of the former municipal center campus were informally identified as a potential funding source for the demolition/site clean up of the former municipal center,and/or funding for the construction of Fire Station 92.No formal/final action was taken by the Council on this item. (3)Purchase Agreement,phase 2:based on staffs discussions with GS Land,and the current condition of the market place, staff believes the second phase of the GS Land Purchase Agreement will not close as-is. Staff expects GS Land will either walk away from the agreement, or renegotiate for a lower sale price.