Council Memorandum Background: Proposal Description:

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1 Council Memorandum To: City Council From: Steve Glueck, Director of Community and Economic Development Through: Jason T. Slowinski, City Manager Date: August 3, 2016 Re: Contract to Sell Lots 1 and 2, Catamount Subdivision Filing No.1 Background: When City Council purchased the 29 acre site for the city shops project in 2005, Council began discussing the sale of surplus property (above the parcel needed for the project) to repay an interfund loan utilized in the purchase. Council approved a subdivision of the property creating six office or light industrial lots for sale (see attached brochure). Council conducted a proposal process from real estate brokers and entered into a series of annual contracts employing Chris Ball and Esther Kettering (then of Cassidy Turley Real Estate Services) as our listing brokers. The most recent contract extension is planned to occur on August 11 th, Offers were received and two sales occurred in 2007, involving Lots 3 and 7. Beginning in 2008, the economic recession eliminated all interest in industrial land purchases for the entire region, and no offers or credible interest was demonstrated until In 2014, City Council considered a Letter of Intent for purchase of Lot 2, however the purchaser withdrew the offer when it was determined that the property was not zoned for their specific development proposal. The recently received offer for Lots 1 and 2 is the first bona fide offer since that time. By Charter, the sale or disposal of any real estate requires adoption of an ordinance. Since this property was not acquired for park or open space purposes, there are no other requirements beyond Council concurrence with the requested terms and adoption of an ordinance. Proposal Description: The current offer is from a local family entity operating under the name of Erie Partners II LLC. Two of the principals in the partnership are David and Charlene Bailey whom staff has worked with many times over the years. The offer is to purchase the 3.35 acre Lot 1 for $900,000 ($6.16 per square foot) and the 2.5 acre lot 2 of Catamount Subdivision for $700,000 ($6.42 per square foot). The intended use of the two lots is for office and/or light industrial enterprises as allowed by the current zoning. While the

2 current listing price is $6.50 per square foot, the offer is certainly reflective of market and is strongly recommended by staff. The offer is subject to property and title related due diligence, which is a standard real estate condition for a commercial property transaction. The contract is not subject to securing site plan approval, as the purchaser may not build immediately. Council should note that the contract does allow the purchaser to delete either of the lots (or both) during the due diligence period, but that the current intention is to acquire both. Fiscal Impact: The proposed sale price of the parcel is $900,000 for Lot1 and $700,000 for lot 2. The net revenue to the City after a 5% broker commissions and transaction costs would be about $1,515,000. Other staff and City Attorney time to review and prepare documents is included in the adopted General Fund budget. The sale proceeds will be deposited in the Sales and Use Tax Fund, intended to repay a portion of the loan from the Wastewater Fund originally used to purchase the 29 acre parcel. The current principal balance of the loan is about $1,519,000, plus 2016 interest charges. If the complete sale occurs, the debt will be retired and the SUT will be the beneficiary of any future sales of the two remaining lots (4 and 8). Alternatives: At second reading, Council will have the following options: Reject the offer by denying the Ordinance. Accept the offer by approving the Ordinance. Schedule an executive session to provide direction to negotiators. Recommendations: Given the prior sales, the slowly improving state of the market over the past few years, and the attractive terms of the submitted offer, the proposed price and contract is recommended. Attachments: Property Brochure Lots 1 and 2 Vicinity Map Ordinance 2034 and contract Page 2

3 FOR SALE Catamount Business Park Golden, Colorado Business Park Catamount Business Park, situated in Golden s attractive foothills setting, is zoned for office, flex, warehouse and light manufacturing. This is a growing and affluent area enjoying a stable business climate and historically low vacancy rates. Limited commercial/industrial land in the foothills communities preserves value and influences appreciation. 1 Pine Ridge Rd. 2 3 Catamount Business Park offers a master drainage plan with off-site detention ponds, preserving and maximizing usable ground for each lot owner. Catamount Business Park features generous native landscaping and an appealing streetscape. These features enhance the quality and value of the remaining lots available for sale. Please see reverse for aerial. 5 A 4 Catamount Dr. 7 6 B 8 Golden Gate Canyon Rd. Lot Acres Total Price $948, $707, Sold $475, City of Golden Public Works Landmarks Commission Echo Serve $444,530 A N/A Open Space/Drainage B N/A Open Space/Drainage 1515 Arapahoe Street, Suite 1200 / Denver, Colorado / phone / fax / cushmanwakefield.com

4 FOR SALE Catamount Business Park Golden, Colorado To Boulder SITE McIntyre St. To Denver GOLDEN INTERSTATE 70 Denver West Office Park To Highlands Ranch 6th Ave. To Denver To Vail INTERSTATE 70 For more information, please contact: 1515 Arapahoe Street, Suite 1200 Denver, Colorado Chris Ball, sior, ccim Senior Vice President Esther Kettering, mba Senior Vice President T F cushmanwakefield.com Cushman & Wakefield Copyright No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question.

5 BRICKYARD ROAD PINE RIDGE ROAD JESSE LANE LOU'S LOOP BRICKYARD CIRCLE HOG BACK DRIVE 1 2 BRICKYARD ROAD AVERY STREET 93 HIGHWAY GOLDEN GATE CANYON ROAD CATAMOUNT DRIVE COUNTY 4070 ROAD SPYDERCO WAY N JACKSON STREET VIRGINIA STREET. Catamount Subdivision Filing No. 1 Vicinity Map Feet Lots 1 & 2

6 ORDINANCE NO AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GOLDEN AUTHORIZING THE CONVEYANCE OF REAL PROPERTY AT 1150 PINE RIDGE ROAD AND 1370 CATAMOUNT DRIVE WHEREAS, the City is the owner of two parcels of real property in Golden, Colorado, located at 1150 Pine Ridge Road, as is more particularly described as Lot 1 of the Catamount Subdivision Filing No.1, and 1370 Catamount Drive, as is more particularly described as Lot 2 of the Catamount Subdivision Filing No.1, (the Property ); and WHEREAS, the Property is a portion of a larger parcel of property that was acquired by the City from Lance and JoAnn Kilgroe in February 2006; and WHEREAS, the City s acquisition of the Property was authorized by Resolution Nos.1564 and 1650, acknowledging that one of the potential purposes for the acquisition would be for disposal of surplus portions; and WHEREAS, the Property described as Lots 1 and 2 of the Catamount Subdivision Filing No.1 is found by the City Council to be surplus property; and WHEREAS, the Property is not, and has not been used or held by the City for cemetery, park, or recreational purposes, and thus may be disposed of by the City without approval of the electorate; and WHEREAS, City Council believes it would be in the best interests of the citizens of the City of Golden to convey the Property. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GOLDEN, COLORADO: Section 1. The Contract to Buy and Sell the Property described as Lots 1 and 2 of the Catamount Subdivision Filing No.1, is ratified and approved in the form substantially as attached hereto as Exhibit A. Section 2. The conveyance of the Property in accordance with such agreements is authorized and the Mayor is authorized to execute all documents as are necessary to effectuate conveyance of the Property. Section 3. If any article, section, paragraph, sentence, clause or phrase of this ordinance is held to be unconstitutional or invalid for any reason, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The city council hereby declares that it would have passed this ordinance and each part or

7 Ordinance 2034 Page 2 of 2 parts hereof irrespective of the fact that any one part or parts be declared unconstitutional or invalid. Section 4. All other ordinances or portions thereof inconsistent or conflicting with this ordinance or any portion hereof are hereby repealed to the extent of such inconsistency or conflict. Section 5. The repeal or modification of any provision of the Municipal Code of the City of Golden by this ordinance shall not release, extinguish, alter, modify or change in whole or in part any penalty, forfeiture or liability, either civil or criminal, which shall have been incurred under such provision. Each provision shall be treated and held as still remaining in force for the purpose of sustaining any and all proper actions, suits, proceedings and prosecutions for enforcement of the penalty, forfeiture or liability, as well as for the purpose of sustaining any judgment, decree or order which can or may be rendered, entered or made in such actions, suits, proceedings or prosecutions. Section 6. This ordinance is deemed necessary for the protection of the health, welfare and safety of the community. INTRODUCED, READ, PASSED AND ORDERED PUBLISHED THE DAY OF, PASSED AND ADOPTED UPON SECOND READING AND ORDERED PUBLISHED THE DAY OF, ATTEST: Marjorie N. Sloan Mayor Susan M. Brooks, MMC City Clerk APPROVED AS TO FORM: David S. Williamson City Attorney

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