ARLINGTON COUNTY, VIRGINIA. County Board Agenda Item Meeting of December 12, 2015

Transcription

1 ARLINGTON COUNTY, VIRGINIA County Board Agenda Item Meeting of December 12, 2015 DATE: December 3, 2015 SUBJECT: Option Agreement Between the County Board of Arlington County and Virginia Hospital Center Arlington Health System ( VHC ), Granting to VHC an Option to Purchase the Real Property, with Improvements, Known as 1800 North Edison Street, Arlington, Virginia, RPC No C. M. RECOMMENDATIONS: 1. Approve the attached Option Agreement Between the County Board of Arlington County and Virginia Hospital Center Arlington Health System ( VHC ), Granting to VHC an Option to Purchase the Real Property, with Improvements, Known as 1800 North Edison Street, Arlington, Virginia, RPC No Authorize the Real Estate Bureau Chief, Department of Environmental Services, or his designee, to execute the Option Agreement and all related documents, on behalf of the County Board, subject to approval of such Option Agreement and documents, as to form, by the County Attorney. 3. Direct the County Manager to report back to the County Board in February 2016 on what type of public process should take place that would result in a report to the County Board on the Carlin Springs site in time for the May 2017 County Board meeting. This report in May 2017 would provide recommendations on two questions: a. Should the County choose the parcel at the Carlin Springs Site as compensation? b. If yes, for what purpose should the site be used? ISSUES: There are no outstanding issues relating to approval of the Option Agreement. SUMMARY: Upon approval of the Option Agreement, execution of the Option Agreement on behalf of the County Board, and the payment, by VHC, of the $100, Option Price, VHC will have an option to purchase the County property, with improvements, known as 1800 North County Manager: ##### County Attorney: ***** 35. Staff: Tim O Hora, DES-Real Estate; Michael Halewski, DCPHD

2 Edison Street, Arlington, Virginia, RPC No in accordance with the terms and conditions specified in the Option Agreement. BACKGROUND: VHC has served the Arlington community and the region as a valuable health resource and economic asset for more than 70 years, providing a consistently high quality of health care services to the Arlington community and the region. The continued success of VHC is important to the Arlington community, both to maintain and increase the availability of highquality health care to its citizens, and for the economic benefits associated with having a major health center in the County. The historical growth of Arlington County s population, as well as the hospital s growing reputation, have resulted in continual increases in the demand for VHC s services and the need for more in-patient beds: In 2014, 65% of the days the hospital operated were at or above an 80% occupancy level. In 2014, the number of patients exceeded the available beds on 83 days. As a result, VHC requires additional space to expand to meet current and anticipated future demand for VHC services, and to allow VHC to maintain, and further enhance, its growing reputation as a high quality health care services provider. In an increasingly built-out Arlington, the abutting 5.5 acre County-owned Property, located at 1800 N. Edison (the Edison Property ), is clearly the logical place for VHC expansion. The County has recently relocated, to other locations within the County, many of the services it offered at the Edison Property. VHC requested the County Board to consider selling the Edison Property to VHC to facilitate the needed expansion of the VHC physical plant and services. At a regular meeting of the County Board in April 2015, VHC made a public appeal to the County Board for a land sale or exchange that would allow VHC to expand onto the Edison Property. In response, Board Chair Mary Hynes stated: Everybody up here [on the dais] believes that the hospital provides a really important service to Arlingtonians, and that working with them is important to ensuring that continues into the future. At a regular meeting of the County Board on September 19, 2015, the County Board approved a non-binding Letter of Intent that provided a framework, and the general terms and conditions upon which the County Board would propose to grant, and VHC would propose to receive, an Option to Purchase the Edison Property. The terms and conditions of the attached proposed Option Agreement were negotiated between County staff and VHC, and are generally consistent with the Letter of Intent approved by the County Board and signed by the County Manager in September. DISCUSSION: The attached Option Agreement, if approved by the County Board, would grant VHC an option to purchase the approximately 5.5 acre Edison Complex from the County Board on the terms and conditions specified therein. The Option Agreement includes the following significant provisions: - 2 -

3 VHC will be required to pay the County Board a non-refundable $100, fee as consideration for the option to purchase. If the Option is exercised, the payment will be applied against the purchase price to be paid by VHC; The earliest date that VHC can exercise its option to purchase is thirty (30) months after the Effective Date of the Option Agreement. The latest VHC can exercise the option to purchase is forty-eight (48) months after the Effective Date of the Option Agreement; VHC must complete its master planning of the hospital expansion, and obtain all necessary County land use and state regulatory approvals before exercising the option to purchase; The purchase price (i.e., the fair market value of Edison Property) will be negotiated/determined after VHC exercises the option to purchase. The minimum purchase price will be $12.56 million (the current appraised value of the Edison Property); If the parties cannot agree on the purchase price, they will use a three-appraiser method to establish the fair market value of the Edison Property; The County, at its option, may receive cash, specified VHC-owned real estate (including its Carlin Springs Road site), or a combination thereof, for the purchase price; Except for the Carlin Springs Road site, the County will have sixty (60) days after VHC exercises the option to select any of seven (7) VHC properties to purchase from VHC. Selected properties shall be appraised, and the appraised value shall be deducted from the purchase price of the Edison Property; As to the Carlin Springs Road Property, the County will have until the later to occur of: i) eighteen (18) months after the effective date of the Agreement; or ii) sixty (60) days after the date that VHC has been granted a Certificate of Public Need (COPN) for additional beds and campus expansion, to elect to acquire the Carlin Springs Road site from VHC as partial consideration for the County s conveyance of the Edison Property to VHC; The County will have the right to rescind its election of exchange properties, if the value of the selected properties exceeds the fair market value of the Edison Property; At closing, a restrictive covenant will be recorded that will limit use of Edison Property to hospital uses, with certain limited accessory uses and prohibitions. The Option Agreement includes mutual right of entry letters (to perform various inspections) by the parties; to allow VHC access to the Edison Property and to allow County access to each of the various VHC-owned properties. The Option Agreement also contains typical representations, and warranties, and other provisions to protect the County as a local government. Additional County Board actions will be required: i) for a County Board election to acquire any of the seven designated VHC exchange properties, from VHC, as whole or part consideration for the County s conveyance of the Edison Property to VHC; and, ii) if such an acquisition election is made, to approve and authorize execution of any Agreement of Sale necessary to effectuate the acquisition. FISCAL IMPACT: The $100, received from VHC as the consideration for the Option Agreement will be deposited into the County s General Fund

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98 V i c i n i t y M a p N o r t h E d i s o n S t r e e t R P C # TH RD N 19TH ST N 19TH ST N N EDISON ST N GEORGE MASON DR Feet Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2013 Commonwealth of Virginia. Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center. Produced and September Contact us at gismc@arlingtonva.us for spatial reference notes. 17th ST N ±

99 V i c i n i t y M a p N o r t h E d i s o n S t r e e t R P C # N CAMERON ST N EMERSON ST 20TH ST N 19TH ST N N COLUMBUS ST 19TH RD N 19TH ST N N DINWIDDIE ST N EDISON ST 18TH ST N N GREENBRIER ST N GEORGE MASON DR 17t h ST N 17TH RD N 17TH ST N 17TH ST N HARRISON ST N Feet Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2013 Commonwealth of Virginia. 16TH RD N ± 16TH ST N Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center. Produced and September Contact us at gismc@arlingtonva.us for spatial reference notes.

100 Vicinity Map 1800 North Edison Street RPC # H 9T RD N 1 1 H 9T ST H 9T ST N N NE DIS ON ST NG E RG EO N SO MA DR Feet Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2013 Commonwealth of Virginia. TN 17th S Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center. Produced and September Contact us at gismc@arlingtonva.us for spatial reference notes. ±