REPORT TO THE CHIEF ADMINISTRATIVE OFFICER FROM THE DEVELOPMENT AND ENGINEERING SERVICES DEPARTMENT ON PROPERTY PURCHASE FOR DOWNTOWN PARKING LOAN AUTHORIZATION BYLAW BYLAW NO. 14-1-173 March 6, 2014 PURPOSE To seek Council's approval to initiate a borrowing bylaw for $4.8 million to acquire 393 Seymour Street and 368 4th Avenue, collectively referred to as the Kamloops Daily News property, to be utilized for parking. SUMMARY At the Closed Council meeting on February 18, 2014, Council authorized the acquisition from Glacier Media (Glacier) of 393 Seymour Street and 368 4th Avenue for the purchase price of $4.8 million. Administration has recommended that this site, a respondent to the Downtown Parking Solutions Expression of Interest (EOI), be acquired and utilized to provide immediate monthly parking for downtown. The 60,000 sq. ft. parcel contains the existing building and 120 parking stalls. Currently 50 of these stalls are offered to the public for monthly parking. With the January 2014 closure of the Kamloops Daily News operation, the full 120 stalls would be available. If the existing building, which has a ground floor footprint of 19,500 sq. ft., were demolished and the parking lot reconfigured, the total yield increases to approximately 190 stalls. The negotiated purchase price for the 60,000 sq. ft. site with the two-storey with basement building is $4.8 million. The City received an appraisal of the property dated August 29, 2013, which estimated the fair market value at $4.6 million. Glacier had a separate appraisal conducted, which estimated the fair market value at $5.56 million. The purchase price of $4.8 million is 4.3% above the City's appraised value. As Administration is aware of other legitimate interest in this parcel, the price of $4.8 million is supportable. The sale is scheduled to complete on August 29, 2014. Administration recommends that the purchase be funded through borrowing and the debt serviced from a combination of monthly parking revenues and on-street parking meter revenue: Borrowing cost on $4.8 million (amortized over 30 years) $277,600/year Revenue from 120 monthly parking stalls at $75/stall Revenue required from uncommitted New Parking Infrastructure Reserve $108,000/year $169,600/year T:\DES\REAL ESTATE\REP\2014\Kamloops Daily News Property Loan Authorization Bylaw.docx 59
PROPERTY PURCHASE FOR DOWNTOWN PARKING March 6, 2014 LOAN AUTHORIZATION BYLAW NO. 14-1-173 Page 2 With the scheduled January 1, 2015, parking meter rate increase, it is projected that an additional $200,000 per year will be generated for the new Parking Infrastructure Reserve based on current usage rates. Accordingly, this new reserve is adequately funded to cover any shortage in monthly parking revenue that may occur. A quote of $900,000 has been provided by a demolition contractor should the City look to demolish the building. A Class "C" cost estimate identifies a total project amount of $370,000 to develop the parking lot. It is proposed that the demolition and the parking lot redevelopment be funded through the Parking Reserve. The uncommitted balance in the Parking Reserve is $1.5 million, with a projected annual contribution of $225,000. As the Kamloops Daily News site is an initial respondent to the Downtown Parking Solutions EOI, the purchase price reflects market value, and the purchase of the land and development of parking stalls can be funded through parking revenues (parking paying for parking), it is recommended that Council advance the readings of the loan authorization bylaw. Property Purchase for Downtown Parking Loan Authorization Bylaw No. 14-1-173 is attached to this report as Attachment "A". RECOMMENDATION: That Council authorize: a) Property Purchase for Downtown Parking Loan Authorization Bylaw No. 14-1-173 be introduced and read a first, second, and third time; and b) The 2014-2018 Financial Plan be amended to include the purchase of 393 Seymour Street and 368 4th Avenue for $4.8 million, to be funded from long-term debt. COUNCIL POLICY There is no applicable Council policy. T:\DES\REAL ESTATE\REP\2014\Kamloops Daily News Property Loan Authorization Bylaw.docx 60
PROPERTY PURCHASE FOR DOWNTOWN PARKING March 6, 2014 LOAN AUTHORIZATION BYLAW NO. 14-1-173 Page 3 M. Kwiatkowski, P.Eng. Development and Engineering Services Director Approved for Council Consideration: Concurrence: S. E. Edwards, BBA, CMA, Finance Director Author: D. W. Freeman, RI(BC), Assistant Development and Engineering Services Director/Real Estate Manager DWF/lm/dla Attachment T:\DES\REAL ESTATE\REP\2014\Kamloops Daily News Property Loan Authorization Bylaw.docx 61
ATTACHMENT "A" 62
ATTACHMENT "A" CITY OF KAMLOOPS BYLAW NO. 14-1-173 A BYLAW TO AUTHORIZE THE BORROWING OF THE ESTIMATED COST TO PURCHASE PROPERTY FOR DOWNTOWN PARKING WHEREAS it is deemed desirable and expedient to purchase property to be utilized for parking in the downtown area; AND WHEREAS the estimated cost to purchase property legally described as Parcel Z, Block 29, Plan 193 (393 Seymour Street); and Lot 2, Plan 21076 and Lots 11, 12, 13, and 14, Block 29, Plan 193 (368 4th Avenue) for downtown parking, including expenses incidental thereto is the sum of Four Million Eight Hundred Thousand Dollars ($4,800,000), of which the sum of Four Million Eight Hundred Thousand Dollars ($4,800,000) is the amount of debt intended to be created by this bylaw; NOW THEREFORE the Municipal Council of the City of Kamloops, in open meeting assembled, enacts as follows: 1. The Council is hereby empowered and authorized to undertake and carry out or cause to be carried out for the purchase of property for downtown parking referred to in this bylaw generally in accordance with specifications on file in the Municipal Office and to do all things necessary in connection therewith and without limiting the generality of the foregoing: a) To borrow upon the credit of the municipality a sum not exceeding Four Million Eight Hundred Thousand Dollars ($4,800,000); and b) To acquire all such real property, easements, rights-of-way, licences, rights, or authorities as may be requisite or desirable for or in connection with the purchase of property for downtown parking. 2. The maximum term for which debentures may be issued to secure the debt created by this bylaw is thirty (30) years. 3. This bylaw may be cited as the "Property Purchase for Downtown Parking Loan Authorization Bylaw No. 14-1-173, 2014". 63
ATTACHMENT "A" BYLAW NO. 14-1-173 PAGE 2 READ A FIRST TIME the day of, 2014. READ A SECOND TIME the day of, 2014. READ A THIRD TIME the day of, 2014. RECEIVED THE APPROVAL of the INSPECTOR OF MUNICIPALITIES day of, 2014. ADOPTED this day of, 2014. MAYOR CORPORATE OFFICER 64