EXECTIVE SUMMARY Page 1 f 8 ACTION ITEM: ISSUE: Pursuant f ABOR Plicy 7-204 and 7-207, seeks apprval in the alternative (i) t sell, (ii) t lease fr a lng term r (iii) t lease with a sale prvisin the apprximately 9.5 acres f ASU Ri Salad prperty lcated n the nrth side f Ri Salad Parkway and east f Rural Rad, Tempe. ABOR Plicy 7-204.A requires ABOR apprval f a sale f ASU real prperty. ABOR Plicy 7-207.A requires ABOR apprval f a lngterm lease f ASU real prperty. BACKGROUND: wns apprximately 9.5 acres nrth f Ri Salad Parkway and n the east side f Rural Rad in Tempe, which is shwn in Attachment 1 (ASU Ri Salad East Prperty). The interim legal descriptins fr the tw parcels cntained within the prperty are shwn in Attachment 3. Under the ASU cmprehensive master plan, the Tempe campus can be advanced withut the ASU Ri Salad East Prperty. In February, 2006, the Arizna Bard f Regents authrized the sale f this prperty by auctin, which is shwn as Attachment 2. The prperty was well advertised and appeared t have significant interest in it by the private sectr. Hwever, at the cnclusin f the auctin prcess, ASU received n ffers. ASU has canvassed thse parties that had expressed an interest in the prperty and discvered that they had chsen nt t respnd due t market uncertainty, the auctin prcess based n a minimum bid f appraised value, shrt time frame t clsing, and ther factrs. ASU desires t dispse f this prperty and in ding s t realize its full value. There are tw primary factrs that affect ASU's ability t achieve this gal and that present challenges t a develper f the prperty: First, the cmmercial real estate market in the Phenix metrplitan area is in a perid f adjustment as t value f land. Secnd, the ASU Ri Salad East Prperty has a number f easements, and ther encumbrances n it. One is fr Arizna Public Service high vltage (230 K.V.) pwer lines and the twers supprting them. The site is als encumbered by a large City f Phenix waterline. CONTACT: Carl Campbell, Executive Vice President and Chief Finance Officer, (480) 727-9925; carl.n.campbell@asu.edu
EXECTIVE SUMMARY Page 2 f 8 ASU's plan t deal with these challenges and t maximize the land value is t cnduct a request fr prpsals (RFP) cmpetitin fr a develper f the ASU Ri Salad East Prperty. Develper selectin will be based n the strength f the develper team, financial capacity, prpsal fr highest and best use f the prperty and prpsed terms. ASU and the develper will wrk tgether t determine the mst advantageus cnveyance methd, which might be, fr example, a lng-term lease f the prperty, a sale r a leasepurchase agreement. While wrking with the selected develper, ASU will btain tw Re-use appraisals that will determine land value based n the develper's prpsed plan and current market influences. Due t fluctuating market values, ASU will btain the tw appraisals as clse t cnsummatin f the transactin as is practicable. In any event the tw appraisals will nt be mre than 6 mnths prir t the cnsummatin f the transactin. The minimum value ASU wuld btain fr the lease r sale f the prperty wuld be based n the appraisals. In the event f a lease r lease-purchase, it is the intent f this prcess that ASU receive the value in the frm f a pre-paid lease. The sales and/r pre-paid lease price wuld nt be lwer than the lwer f the tw appraisals. The ther terms f the sale r lease wuld be as negtiated by ASU and the develper. ASU has nt received any current ffers t purchase the ASU Ri Salad East Prperty. Prir t selectin f a develper and prir t cmpletin f the sale r lease f the ASU Ri Salad East Prperty, ASU will btain apprval by the ABOR Capital Cmmittee f the primary terms f the transactin and will als reprt the tw appraisers values t Bard Cunsel. ASU intends t use the prceeds t supprt nging capital investment tward its educatinal and research aspiratins. Current funding frm budgeted use f tuitin and frm peridic bnd prgrams has nt been sufficient t supprt ASU s wrk t catch-up after many years f underinvestment. Cntinued investments in the educatinal infrastructure, primarily in renvatins, imprvements, and expansin f its classrms and teaching labratries are needed in the face f grwing enrllment, expansin f prgrams, and histrical under-funding f building renewal needs. On the research side, renvatin and imprvements are needed t supprt the investment in high perfrmance faculty and research capabilities. This investment in start-up equipment, labratry custmizatin, and persnnel is critical t prperly supprt and attract qualified faculty t the new research facilities and prgrams made pssible thrugh Research Infrastructure, TRIF, and direct University investments.
EXECTIVE SUMMARY Page 3 f 8 As prvided in ABOR Plicy 7-202, ASU requests waiver f the fllwing ABOR Plicy requirements: The requirement in ABOR Plicy 7-204.A and G that there be a public auctin fr a sale f real prperty. The requirement in ABOR Plicy 7-204.A.4 that this executive summary include the terms f sale f the prperty. The terms will nt be determined until a develper is selected and ASU negtiates with the develper. The requirement in ABOR Plicy 7-206.D that each appraisal be within 6 mnths f this ABOR actin. The requirement in ABOR Plicy 7-206.E that ASU reprt the appraiser's value f the prperty t Bard Cunsel when ABOR apprval is requested. The appraisals will be btained later and as described abve the appraisers' values will be reprted t Bard Cunsel at the time f Capital Cmmittee review f the transactin terms and cnditins. RECOMMENDATION: RESOLVED: That the President, the Executive Vice President and Chief Finance Officer, and the Assistant Vice President fr Real Estate are each separately hereby authrized t take all apprpriate actin t negtiate the sale, lease, lease-purchase, r ther cnveyance f the Ri Salad East Prperty in whle r in part and in ne r mre transactins with the stipulatin that the primary terms be reviewed and apprved by the Capital Cmmittee prir t cmpletin f the transactin. FURTHER RESOVLED: that the requested waivers f requirements in ABOR Plicy 7-204.A, 7-204.A.4, 7-206.D, and 7-206.E described abve are hereby granted.
EXECTIVE SUMMARY Page 4 f 8 Attachment 1
EXECTIVE SUMMARY Page 5 f 8 Attachment 2 ACTION ITEM: ISSUE: BACKGROUND: Pursuant t ABOR Plicy 7-204, seeks apprval t sell in ne r mre auctins the apprximately 9.5 acres f ASU Ri Salad prperty lcated n the nrth side f Ri Salad Parkway and east f Rural Rad, Tempe. ABOR Plicy 7-204.A requires ABOR apprval f a sale f ASU real prperty and als requires a public auctin fr the sale f ASU real prperty. wns apprximately 37.1 acres f land lcated nrth f Ri Salad Parkway n the east and the west sides f Rural Rad alng the suth bank f the Tempe Twn Lake. The land t be sld is shwn in Attachment 1 (ASU Ri Salad Prperty). In March f 2000, ASU issued an RFP fr Master Develpment f the ASU Ri Salad Prperty. As a result f that RFP, ASU selected SunCr Develpment Cmpany and entered int a memrandum f understanding (Memrandum f Understanding) that cntemplated a lng-term grund lease t SunCr under which SunCr wuld develp a mixed-use prject. The SunCr Memrandum f Understanding des nt apply t the 9.5 acres t the east f Rural Rad. In 2002, ASU began a cmprehensive master planning prcess t address the space and facility needs t advance the cncept fr ne university in many places. The Ri Salad develpment was put n hld pending the cmpletin and utcme f that plan. The plan has nw been cmpleted. The master plan shws that the Tempe campus can be advanced withut the Ri Salad Prperty. ASU prpses t sell in whle r in parts and in ne r mre auctin sales under ABOR Plicy 7-204 the apprximately 9.5 acres f ASU Ri Salad Prperty shwn n Attachment 1. Legal descriptins are nt included in this executive summary. ASU will nt have the legal descriptins until the prperty is surveyed. On July 25, 2005, ASU btained an appraisal f the prperty frm Nagy and Assciates estimating the market value t be $36.00 per square ft. A secnd appraisal frm CBRE is in the prcess f being cmpleted. CONTACT: Richard Stanley, Senir Vice President and University Planner, (480) 727-8307; richard.h.stanley@asu.edu Carl Campbell, Executive Vice President and Chief Finance Officer; (480) 727-9925 carl.n.campbell@asu.edu
EXECTIVE SUMMARY Page 6 f 8 ASU intends t use the apprximately $14 millin f the net prceeds that wuld be generated at this appraised value t supprt an investment in high perfrmance faculty and research capabilities. This investment in start-up equipment, labratry custmizatin, and persnnel is critical t prperly supprt and attract qualified faculty t the new research facilities and prgrams made pssible thrugh Research Infrastructure, TRIF, and direct University investments. These prir investments make it a critical t have available start-up funding t allw high perfrmance faculty research grups t be develped at ASU. RECOMMENDATION: RESOLVED: That the President, the Senir Vice President and University Planner, the Executive Vice President and Chief Finance Officer, and the Assciate Vice President fr University Business Services f are each separately hereby authrized t take all apprpriate actins t sell the Ri Salad Prperty in whle r in part and in ne r mre auctins and t deliver all dcuments and agreements assciated with the auctin sale r sales f the Ri Salad Prperty n substantially the terms described abve. FURTHER RESOLVED: that the requirement in ABOR Plicy Sectin 7-204.A that this executive summary include legal descriptins f the Ri Salad Prperty is waived.
EXECTIVE SUMMARY Page 7 f 8 PARCEL NUMBER ONE Attachment 3 INTERIM LEGAL DESCRIPTION OF THE PROPERTY The Suth half f the Suth half f the Suthwest quarter f the Nrthwest quarter and the Sutheast quarter f the Nrtheast quarter f the Sutheast quarter f the Suthwest quarter f the Nrthwest quarter f Sectin 14, Twnship 1 Nrth, Range 4 East f the Gila and Salt River Base and Meridian, Maricpa Cunty Arizna; EXCEPT all minerals; and als EXCEPT that prtin f the Nrthwest quarter f Sectin 14, Twnship 1 Nrth, Range 4 East f the Gila and Salt River Base and Meridian, Maricpa Cunty, Arizna, being mre particularly described as fllws: COMMENCING at the West quarter crner f said Sectin 14; THENCE Nrth 00 degrees 07 minutes 01 secnds East, 150.97 feet alng the West line f said Sectin 14; THENCE departing said West line f Sectin 14, Nrth 89 degrees 52 minutes 59 secnds West, 65.00 feet t the East line f the West 65.00 feet f said Sectin 14 and t the pint f beginning; THENCE Nrth 00 degrees 07 minutes 01 secnds East, 181.98 feet alng said East line f the West 65.00 feet f Sectin 14 t the Nrth line f the Suth half f the Suth half f the Suthwest quarter f the Nrthwest quarter f said Sectin 14; THENCE departing said East line f the West 65.00 feet f Sectin 14, Suth 89 degrees 28 minutes 10 secnds East, 1061.90 feet alng said Nrth line f the Suth half f the Suth half f the Suthwest quarter f the Nrthwest quarter f Sectin 14 t the Suthwest crner f the Sutheast quarter f the Nrtheast quarter f the Sutheast quarter f the Suthwest quarter f said Nrthwest quarter f Sectin 14; THENCE Nrth 00 degrees 19 minutes 06 secnds West, 167.89 feet alng the West line f said Sutheast quarter f the Nrtheast quarter f the Sutheast quarter f the Suthwest quarter f the Nrthwest quarter f Sectin 14 t the Nrthwest crner f the Sutheast quarter f the Nrtheast quarter f the Sutheast quarter f the Suthwest quarter f said Nrthwest quarter f Sectin 14; THENCE Suth 89 degrees 31 minutes 43 secnds East, 160.80 feet alng the Nrth line f said Sutheast quarter f the Nrtheast quarter f the Sutheast quarter f the Suthwest quarter f the Nrthwest quarter f Sectin 14 t the Nrtheast crner f the Sutheast quarter f the Nrtheast quarter f the Sutheast quarter f the Suthwest quarter f said Nrthwest quarter f Sectin 14; THENCE Suth 00 degrees 22 minutes 49 secnds East, 151.14 feet alng said East line f the Suthwest quarter f the Nrthwest quarter f Sectin 14; THENCE departing said East line f the Suthwest quarter f the Nrthwest quarter f Sectin 14, Suth 78 degrees 28 minutes 01 secnds West, 0.01 feet t the beginning f a
EXECTIVE SUMMARY Page 8 f 8 nn-tangent curve cncave Nrthwesterly, having a radius f 5111.41 feet and t which beginning a radial line bears Suth 31 degrees 07 minutes 48 secnds East; THENCE Suthwesterly 956.01 feet alng said curve, thrugh a central angle f 10 degrees 42 minutes 59 secnds; THENCE n a nn-tangent line, Suth 75 degrees 30 minutes 29 secnds West 235.12 feet t the beginning f a nn-tangent curve cncave Nrtherly, having a radius f 5165.75 feet and t which beginning a radial line bears Suth 00 degrees 08 minutes 17 Secnds West; THENCE Westerly 49.59 feet alng said curve, thrugh a central angle f 00 degrees 33 minutes 00 secnds t the pint f beginning, as quit claimed t City f Tempe in Instrument N. 98-1039366. PARCEL NUMBER TWO That part f the Suthwest quarter f Sectin 14, Twnship 1 Nrth, Range 4 East f the Gila and Salt River Base and Meridian, Maricpa Cunty, Arizna mre particularly described as fllws: COMMENCING at the Suthwest crner f Said Sectin 14; THENCE Nrth 0 degrees 18 minutes 53 secnds East alng the West line theref, a distance f 2458.24 feet t the TRUE POINT OF BEGINNING f the parcel herein described; THENCE cntinue Nrth 0 degrees 18 minutes 53 secnds East alng said West line f Sectin 14, a distance f 210.01 feet t the West quarter crner f said Sectin 14; THENCE Suth 89 degrees 09 minutes 47 secnds East alng the Nrth line f said Suthwest quarter, a distance f 1511.22 feet t a pint; THENCE Suth 0 degrees 40 minutes 47 secnds East, a distance f 210.07 feet t a pint; THENCE Nrth 89 degrees 09 minutes 47 secnds West, a distance f 1514.87 feet t the TRUE POINT OF BEGINNING. EXCEPTIONS FROM PARCELS NUMBER ONE AND NUMBER TWO EXCEPT that prtin f land lying within the right f way f Rural Rad, and EXCEPT that prtin f land lying Suth f the Nrth line f the 85.00 ft wide rightf-way dedicatin as described in Instrument number 88-582767, recrds f Maricpa Cunty, Arizna.