MEMORANDUM TO: FROM: Mayor and City Council Eric Berlin, City Administrator DATE: June 2, 2015 RE: Purchase of 1041 Burlington Pursuant to the City Council s direction at its special meeting on May 19, 2015, a contract to purchase the property located at 1041 Burlington is on the Council s agenda June 2, 2015, agenda for your consideration. As originally proposed by Mayor Stielow, this property would be purchased as the permanent new home of the Parks & Recreation Department. During the course of discussion of this item on May 19th, however, councilmembers indicated that they could support the purchase of this property to house the Parks & Recreation Department temporarily, for no more than two years, but not as a permanent home for the department. Therefore, as staff understands it, the building would be purchased, serve as home for Parks & Recreation for two years or less, and then have no use for the City that staff is currently aware of. Given that the stated purpose of obtaining use of this property is temporary, staff would suggest that a lease of the property, rather than a purchase, may be more appropriate. In February, when the property was listed for purchase at $599,000, it was offered for lease at $7,830.63 per month, or $93,967.50 per year. This amount might be reduced now that the asking price for purchase of 1041 Burlington has been reduced by 17% since February. I recognize that one of the Council s concerns with locating a modular building in Caboose Park, as originally discussed, was that doing so would amount to wasting funds on a purpose that would have no lasting value. The same might be said for leasing, rather than purchasing, property. However, obtaining a property that has no intended long-term use, and which needs to be maintained, also has costs. While I recognize that North Kansas City has purchased vacant properties in the past for which 1
it did not have an immediate use, common municipal practice is for a City to purchase property only when it has a specific long-term purpose in mind, rather than to have it in reserve or as an investment. For these reasons, I do recommend that the City Council consider directing staff to enter into negotiations for a long-term lease in lieu of a purchase. If the Council does decide to proceed with purchase of the property, then staff seeks authority to negotiate a short-term lease in order to allow Parks & Recreation to occupy the property as soon as possible. The necessary due diligence to acquire the property should take 90 120 days. As the Council is aware, Parks & Recreation will be dislocated from its current space on July 1. A short-term lease would allow the department to move in and operate while purchase negotiations proceed. Staff would aim to have a short-term lease on the Council s agenda on June 16, 2015. 2
BILL NO. 7042 ORDINANCE NO. 8839 AN ORDINANCE ADOPTING AND APPROVING REAL ESTATE SALE AND PURCHASE AGREEMENT BETWEEN SAM SCARFINO ( AS SELLER) AND THE CITY OF NORTH KANSAS CITY, MISSOURI ( AS BUYER) FOR CERTAIN REAL PROPERTY GENERALLY LOCATED AT 1041 BURLINGTON IN NORTH KANSAS CITY, CLAY COUNTY, MISSOURI, FOR USE BY THE NORTH KANSAS CITY PARKS AND RECREATION BOARD. WHEREAS, the City of North Kansas City, Missouri (the " City") is a third class city and political subdivision duly organized and validly existing under the Constitution and laws of the State of Missouri; and WHEREAS, the Sam Scarfino ( the " Owner") is presently the owner of certain real property located generally at 1041 Burlington in the City of North Kansas City, Missouri, which the City desires to purchase from the Owner, together with all improvements thereon ( collectively, the " Property"), for the use of the North Kansas City Parks and Recreation Board; and WHEREAS, the Owner and the City are collectively referred to as the Parties; and WHEREAS, the Parties desire to enter into that certain Real Estate Sale and Purchase Agreement regarding the real property more fully described in Real Estate Sale and Purchase Agreement ( the " Real Estate Agreement"). NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH KANSAS CITY, MISSOURI, AS FOLLOWS: Section 1. Authorization of Real Estate Agreement. The City Council does hereby find and determine that it is in the best interest of the City of North Kansas City, Missouri, to enter into a Real Estate Sale and Purchase Agreement with SAM SCARFINO for the City' s purchase of certain real property generally located at 1041 Burlington in North Kansas City, Missouri, and all improvements thereon, all as more particularly described in the attached Real Estate Agreement. A copy of said Real Estate Agreement is attached hereto, marked Exhibit " 1", and is incorporated herein by reference. The provisions of said Real Estate Sale and Purchase Agreement are hereby approved and adopted by the City Council of the City of North Kansas City, Missouri. The Mayor and the City Clerk are hereby authorized and directed to execute said Real Estate Sale and Purchase Agreement on behalf of the City of North Kansas City, Missouri. The City is hereby authorized to comply with the terms thereof including, but not limited to, the payment of the Purchase Price as defined in the Real Estate Agreement. The purpose of the purchase of the Property is to provide a suitable and appropriate building for use by the North Kansas City Parks and Recreation Board and for its related activities. Section 2. Further Authority. The City shall, and the mayor, city clerk, city officials and employees of the City are hereby authorized and directed to take such further action, and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance. Section 3. Severability. The sections, paragraphs, sentences, clauses and phrases of this Ordinance shall be severable. In the event that any such section, paragraph, sentence, clause or phrase of this Ordinance is found by a court of competent jurisdiction to be invalid, the remaining portions of this Ordinance are valid, unless the court finds the valid portions of this Ordinance are so essential to and inseparably connected with and dependent upon the void portion that it cannot be presumed that the City has enacted the valid portions without the void ones, or unless the court finds that the valid portions, ORDINANCE PURCHASE OF BRIDGEVIEW HALL FROM SCARFINO 29 MAY2015
standing alone, are incomplete and are incapable of being executed in accordance with the legislative intent. Section 4. Governing Law. This Ordinance shall be governed exclusively by and construed in accordance with the applicable laws of the State of Missouri. Section 5. Effective Date. This Ordinance shall be in full force and effect from and after its passage by the City Council and approval by the Mayor. PASSED this 2nd day of June, 2015. ATTEST: Mayor City Clerk APPROVED this 2nd day of June, 2015. APPROVED AS TO FORM: Mayor City Attorney City Counselor ORDINANCE PURCHASE OF BRIDGEVIEW HALL FROM SCARFING 2 29 MAY2015