Loading...
HomeMy WebLinkAboutCAP 2009-04-13 Item 2B - Lease Agreement - Tukwila Pool with Tukwila School DistrictTO: ISSUE BACKGROUND DISCUSSION City of Tukwila INFORMATIONAL MEMORANDUM Mayor Haggerton Tukwila City Council FROM: Bruce Fletcher, Director of Parks and Recreation DATE: April 8, 2009 SUBJECT: Tukwila Swimming Pool Lease Jim Haggerton, Mayor The swimming pool lease with the Tukwila School District will expire on September 15 2011. If the pool lease is not renewed, the City of Tukwila will no longer be in the aquatics business. Due to budget reasons, King County planned to close the South Central Swimming Pool at the end of 2002. The County and City of Tukwila entered into an intergovernmental transfer agreement allowing the City to own and operate the facility. On January 3, 2003, the City of Tukwila began operations of the Tukwila Swimming Pool and in trade, the County assumed all maintenance and operational responsibility for the South Park Bridge. The City also paid a one- time payment toward the replacement of the bridge. The lease agreement with the Tukwila School District will expire in 2011. The Parks and Recreation Department made a request to extend the lease agreement for an additional 20 years in order to continue to offer aquatic services to our residents and visitors. The School District declined the request as they informed the City that they projected increased school enrollments and may need the property for school expansion. The School District hired a consultant to study the potential enrollment growth for the Tukwila School District and the results showed that enrollments would not increase dramatically as originally thought. After the study was published, the Parks and Recreation Department again contacted the Superintendent to discuss a lease extension. The Superintendent requested to delay the talks into 2009. The district has sent a letter explaining that they may need the pool property in the future in order to expand either the middle school or high school. However they do want to explore a resolution that would either sell the pool property to the City or agree on a lease extension to allow for compensation to the district. I informed the Superintendent that the City would be very interested in purchasing the property at the assessed land value and offered $95,000.00. The Superintendent thanked me for my offer but wanted to order a complete appraisal for the land and improvements. The appraisal came in at $1,015,000.00. This value includes the land and the swimming pool facility. The swimming pool has a strong following of users that includes all age groups and is a recreational asset as shown in our Parks, Recreation and Open Space Plan. INFORMATIONAL MEMO Page 2 RECOMMENDATION With a global economic crisis and declining revenue projections, it does not make sense to purchase a 38- year -old swimming pool that is over valued at $1,015,000.00. It is the recommendation of the Parks and Recreation Department to enter into negotiations that would include a reasonable lease fee paid to the Tukwila School District for the lease extension. The Council is being asked to provide approval to enter into negotiations at the April 27, 2009 Committee of the Whole meeting and subsequent May 4, 2009 Regular Meeting. The lease agreement itself will be brought to the Council for consideration and approval at a future meeting. ATTACHMENTS Tukwila School District Letter dated 1/12/2009 W InfoMemoslInfoMemoSwimming Pool Lease 2009.doc January 12, 2009 Mr. Bruce Fletcher Director City of Tukwila 12424 42 Avenue S. Tukwila, WA 98168 Tuinuirla Sch®®g =s >®sto®ct #4@6 4640 South 144th Street Tukwila, Washington 98168 Phone 206 -901 -8000 Fax 206 901 -8016 Re: South Central Pool Lease Dear Mr. Fletcher: As you are aware, the current lease for the South Central Pool property will expire in the Fall of 2011. In advance of lease expiration, the Tukwila School District wishes to discuss with the City of Tukwila whether, and on what terms, to extend the lease. This lease, which was originally signed by King County and the District in 1971, has a 40 year term. In 2003, King County assigned its interest in the lease to the City. The terms of the lease are very bare bones. It provides no consideration to the District other than the right to apply for use agreements (for which the District must compensate the City). Moreover, the lease does not state who is responsible for demolishing the pool at the end of the lease term or the pool's useful life. Finally, the lease has no provision allowing the District to recapture the property when needed for school purposes, as required under RCW 28A.335.040. The District recognizes that the pool serves a valuable community need for an aquatics facility. However, providing recreational and physical fitness opportunities for the community at large is the City's mission, not the District's. Simply stated, the District's mission is to educate students. The student population in Tukwila is steadily growing, increasing demand on the District's facilities. Because of its proximity to Foster High School and Showalter Middle School, the District may need the pool property in the future in order to expand one or both facilities. That said, the District would like to explore a resolution that allows the City to keep the pool, while at the same time facilitating the District's future plans for expansion. One possibility is for the City to purchase the pool property from the District. The Intergovernmental Transfers of Property Act, Chapter 39.33, gives the City and District the flexibility to negotiate a sale that would benefit both entities. Such a sale would provide the District with revenues it could dedicate toward the purchase of alternative properties in the future. Moreover, a sale would also save the District the time, effort, and expense involved with putting the pool property on the open market. Mr. Bruce Fletcher January 13, 2009 Page 2 From the City's perspective, the purchase would allow the City to continue using the property as an aquatics facility without any fear that the District would recapture it for school purposes in the future, and save the City hundreds of thousands of dollars over having to develop a new aquatics facility. Alternatively, should the District and City agree that the lease should be renewed, the terms will have to be re- negotiated to allow for compensation to the District, the right to recapture the property for school purposes, and to state that the City is responsible for demolishing the pool at the end of the lease teen. In preparation for a potential sale to the City or on the open market, and in compliance with its legal mandate under RCW 28A.335.120, the District will soon be obtaining an appraisal of the pool properly, as well as getting estimates for demolishing the facility. Please give me a call to discuss these issues. I have attached a copy of the 1971 lease for your reference. Should the City agree that it would be in the best interests of both parties for the City to purchase the property, we should authorize our respective legal counsel to discuss the complex issues involved in such a transaction, and to negotiate a sale on our behalf. I look forward to talking with you. Sincerely, C: Board of Director Bill Van deBogert Rhonda Berry, City Administrator