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HomeMy WebLinkAboutCOW 2015-02-09 Item 5D - Ordinance - TMC Chapter 2.64 "Sale of City Property" UpdateCOUNCIL AGENDA SYNOPSIS Meeting Date Prepared by Mayor's review Council review 02/09/15 DCS ,i94'(C L....-1 02/17/15 DCS E Public Hearing Mtg Date ■ CATEGORY I Discussion Mtg Date SPONSOR J Council E 1-/R fl DCD Finance Fire fl IT pi p&R Police p PW I Mayor spoNsows The Council is being asked to approve changes to the City's procedures for selling City Summ,\Ry property. RiNIi wl M BY COW Mtg. CA&P Cmte Utilities Cmte Arts Comm. DATE: 2/3/15 EM INFORMATION ITEM No. 5.D. 47 STAFF SPONSOR.: DEREK SPECK ORIGINAL AG FINDA DATE: 2/9/15 AGENDA ITIIVI TITLE TMC 2.64 Sale of City Property 02/9/15 r Motion Mtg Date El Resolution Mtg Date Z Ordinance Mtg Date 2/17/15 1 Bid Award Mtg Date E Public Hearing Mtg Date Ei Other Mtg Date CATEGORY I Discussion Mtg Date SPONSOR J Council E 1-/R fl DCD Finance Fire fl IT pi p&R Police p PW I Mayor spoNsows The Council is being asked to approve changes to the City's procedures for selling City Summ,\Ry property. RiNIi wl M BY COW Mtg. CA&P Cmte Utilities Cmte Arts Comm. DATE: 2/3/15 4 F&S Cmte E Transportation Cmte Comm. E Planning Comm. CHAIR: HOUGARDY E Parks COMMFTITE RECOMMENDATIONS: SPONSOR/ADMIN. COMMTTTFI Mayor's Office Unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPINDfl'URE R.1(),LJIltl;ID AMOUNT BUDGETED APPROPRIATION REQUIRED $ $ $ Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 2/9/15 MTG. DATE ATTACHMENTS 2/9/15 Informational Memorandum dated 1/28/15 Ordinance in Draft Form Minutes from the Finance and Safety Committee meeting of 2/3/15 2/17/15 47 48 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Finance and Safety Committee Mayor FROM: Economic Development Administrator DATE: January 28, 2015 (Revised February 4, 2015) SUBJECT: TMC 2.64 Sale of City Property (Changes made by Finance and Safety Committee shown underlined on Page 2 below) ISSUE The Council is being asked approve changes to the City's procedures for selling City property. BACKGROUND Tukwila Municipal Code Chapter 2.64 summarizes Tukwila's ordinances related to selling City property such as land and buildings. Ordinance 663 was adopted in 1971 and ordinance 1958 was adopted in 2001. Under the code, authorizing the sale of property is the responsibility of the City Council and processing the transaction is the responsibility of the Mayor. The regulations require the City property to be sold after receiving bids. DISCUSSION In connection with the development of Tukwila Village, City staff recently examined our municipal code related to the property sale. TMC Chapter 2.64 generally describes the process for selling City property as if it is a simple sale in which the City has no other interests other than getting the best price. Further, it appears the intent of section TMC 2.64.030 was to allow exceptions to the bid requirements in situations where any, but not all, of the specified criteria is met because to interpret the code otherwise would render the section useless. Occasionally the City may have opportunities to sell property in which the City's interests are better served by negotiating directly with the purchaser of the property rather than selling the property by bids. The competitive bidding process may be too limiting for the City to get the best price for the property or for the City to leverage the property for other community benefits. Following are some examples of this: Tukwila Village: Over fifteen years ago the City began purchasing property for the Tukwila Village development to eliminate blight and revitalize a neighborhood around Tukwila International Boulevard and South 144th Street. During that time the City has attempted to negotiate development agreements with various developers. In 2011 the City issued a request for qualifications for a proposal to develop the property and selected Tukwila Village Development Associates, LLC (TVDA) as the site developer. In 2012 the City executed a disposition and development agreement with TVDA which outlined the City and developer's agreement. For at least ten years the City has discussed including a King County Library 49 INFORMATIONAL MEMO Page 2 System (KCLS) branch library in the development. In 2012 the City and KCLS agreed on basic deal terms. All of these processes have been very public with Council oversight and approval. We have negotiated a purchase and sale agreement for the library parcel with KCLS and we are ready to negotiate a purchase and sale agreement with TVDA. Although we conducted a bid process for the library parcel, we have not yet conducted a bid process for the Tukwila Village site. However, staff believes that direct negotiations with the purchasers in these instances better serves the City's interests because many of the key terms are discovered through the negotiation process. Further, it may be difficult, if not impossible, to find successful bidders due to the specific, and sometimes complicated terms that will be required for the sale. Thus, staff recommends forgoing the bid process in this instance. Urban Renewal Project (Motels): In 2013 the City began the process to purchase property on Tukwila International Boulevard to eliminate blight and revitalize the neighborhood. In 2014 the City acquired three motels and we expect to complete the other property purchases and demolition in 2015. Staff believes that selling these vacant lots by bids may not get the best price and would not leverage the most benefits for the City and community. Therefore, staff plans to seek Council approval to conduct a developer selection process in late 2015. That process will serve the public interest better than a strict bidding process. Staff recognizes that it is critical for a sale of City property to achieve the most benefit for the City and recommends revisions to the regulations that will allow the Council to approve alternative processes for receiving offers, selecting the buyer, and negotiating the price and other terms. The proposed revisions are attached. At its February 3, 2015 meeting, the Finance and Safety Committee requested two additional changes: 1) Insert language regarding compliance with RCW and /or Attorney approval to further clarify conditions under which an alternative process can be designated by Council. 2) In section 4, change the maximum property value in the Call for Bids exception list to $10,000 FINANCIAL IMPACT This item has no direct financial impact to the City. BUDGET IMPACT This item has no budget impact to the City. RECOMMENDATION The Council is being asked to repeal ordinances 663 and 1958 and enact a new ordinance setting regulations for the sale of City property. The Council is being asked to consider this item at the February 9, 2015 Committee of the Whole meeting and subsequent February 17, 2015 Regular Meeting. ATTACHMENTS Proposed ordinance 50 NOTE: Shaded text (page 2) reflects revisions made after 2/3/15 Finance and Safety Committee meeting. DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, REPEALING ORDINANCE NOS. 663 AND 1958, AS CODIFIED IN TUKWILA MUNICIPAL CODE CHAPTER 2.64, AND REENACTING TUKWILA MUNICIPAL CODE CHAPTER 2.64 RELATED TO THE SALE OF CITY PROPERTY; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council may determine that it is in the City's best interests to sell City property, whether real, personal, or mixed, such as a lot, parcel or portion of such lot or parcel; and WHEREAS, it is the responsibility of the Council to authorize the sale of such property and the responsibility of the Mayor to effect the transaction; and WHEREAS, Chapter 2.64 of the Tukwila Municipal Code currently requires City property to be sold after receiving bids; and WHEREAS, the City Council may determine that in certain situations the City's interests are better served by negotiating directly with a purchaser of the property rather than selling the property by bids; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. TMC Chapter 2.64 Reenacted. Tukwila Municipal Code (TMC) Chapter 2.64 is hereby reenacted to read as follows: W: Word Processing \Ordinances \Sale of City Property strike -thru 2- 5- 15.doc AMS:bjs Page 1 of 4 51 Sections: 2.64.010 2.64.020 2.64.030 2.64.040 2.64.050 2.64.060 CHAPTER 2.64 SALE OF CITY PROPERTY Authorization — Effecting Transfer of Property Conveyance Minimum Price Set Call for Bids — Exceptions Notice of Intent to Sell Opening Bids — Rejection Receipt of Acceptable Offers or Bids — Preparation of Instruments Section 2. TMC Section 2.64.010 is hereby reenacted to read as follows: 2.64.010 Authorization — Effecting Transfer of Property Conveyance Whenever it shall appear to the Mayor and the City Council that it is for the best interests of the City and the people thereof that any lot, parcel, or portion of such lot or parcels is no longer needed and; the property, whether real, personal, or mixed, belonging to the City, should be sold, it shall be the duty of the Council to authorize a sale of such property acting by and through the Mayor of the City, to cause to be effected the conveyance as necessary to transfer the property, after the same has been appraised, and under the limitations and restrictions and in the manner hereinafter provided in this chapter and in State law. Section 3. TMC Section 2.64.020 is hereby reenacted to read as follows: 2.64.020 Minimum Price Set Subsequent to receipt of an assessment of the value of the property, the Council shall fix a minimum price at which such may be sold. No offer or bid shall be deemed acceptable that does not meet the minimum price fixed by the Council. Section 4. TMC Section 2.64.030 is hereby reenacted to read as follows: 2.64.030 CaII for Bids — Exceptions The City Clerk shall cause a call for bids to be published relating to such property, except when: 1. Selling to a governmental agency in the manner provided in the laws of the State of Washington; 2. The value of the property to be sold is less than $510;000 00; and 3. The Council setting forth the facts by resolution has declared an emergency to exist, or 4. The Council has approved an alternative process for receiving offers, selecting the buyer and negotiating the price. W: Word Processing \Ordinances \Sale of City Property strike -thru 2- 5- 15.doc AMS:bjs 52 Page 2 of 4 Section 5. TMC Section 2.64.040 is hereby reenacted to read as follows: 2.64.040 Notice of Intent to Sell The City Clerk shall give notice of the City's intention to make such sale by one publication in the official newspaper of the City; the City Clerk shall also cause notice of the City's intention to make such sales to be posted in the City's on -line Digital Records Center. bBoth posting and the date of publication must be at least five calendar days before the final date for submission of offers or such compctitivc bids. Section 6. TMC Section 2.64.050 is hereby reenacted to read as follows: 2.64.050 Opening Bids — Rejection The bBids shall be opened in public at the time and place stated in such publication. The City Council may reject any and all bids, or the bid for any one or more of the parcels, real or personal, included in the aforesaid call for bids. Section 7. TMC Section 2.64.060 is hereby reenacted to read as follows: 2.64.060 Receipt of Acceptable Offers or Bids — Preparation of Instruments Upon receipt of an acceptable offer or bid relating to the property, the Council shall authorize the Mayor to cause necessary instruments to be prepared, and further authorizes the Mayor to execute such instruments. such property. Section 8. Repealer. Ordinance Nos. 663 and 1958 are hereby repealed. Section 9. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section /subsection numbering. Section 10. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. W: Word Processing \Ordinances\Sale of City Property strike -thru 2- 5- 15.doc AMS:bjs Page 3 of 4 53 Section 11. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2015. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Processing \Ordinances \Sale of City Property strike -thru 2- 5- 15.doc AMS:bjs 54 Page 4 of 4 Finance & Safety Committee Minutes February 3, 2015 — Page 2 B. Ordinance: Sale of City Property Staff is seeking Council approval of an ordinance that would amend Tukwila Municipal Code Chapter 2.64 to modify the process for selling City property. The current Code requires that following a bid process, the City Council authorizes a sale and the Mayor processes the transaction. This assumes a simple sale in which the City has no other interest other than attaining the best price. However, circumstances such as the Tukwila Village and Urban Renewal projects are examples of times where the City may be better served by negotiating directly with a developer rather than engaging a competitive bidding process. The proposed ordinance would allow the Council to approve an alternative process under certain circumstances such as these. The proposal also establishes a new maximum value of $5,000 in the exceptions list, simplifies terminology regarding assessment of value, and replaces reference to a City Hall bulletin board with the City's online records center. Committee members discussed the proposal and supported it with the following changes: 1) Insert language regarding compliance with RCW and /or Attorney approval to further clarify conditions under which an alternative process can be designated by Council. 2) In section 4, change the maximum property value in the Call for Bids exception list to $10,000 UNANIMOUS APPROVAL AS AMENDED. FORWARD TO FEBRUARY 9, 2015 COMMITTEE OF THE WHOLE. C. Contract: Federal Government Affairs Services The City has learned that its main government affairs consultants at Ball Janik, Hal Hiemstra and Michelle Giguere, have started their own company called Summit Strategies Government Affairs, LLC, effective February 1, 2015. Ball Janik will no longer be offering government affairs services and the City must decide if it would like to contract with Summit Strategies instead. No changes are expected other than contact email addresses. A draft contract has been prepared which mirrors the previous contract with Ball Janik minus the fee and expenses incurred in January. It provides for a 2015 -2016 flat monthly rate of $6,375 plus expenses not to exceed $3,240 annually. The total annual rate is not to exceed $73,365. UNANIMOUS APPROVAL. FORWARD TO FEBRUARY 9, 2015 COMMITTEE OF THE WHOLE. III. MISCELLANEOUS Meeting adjourned at 6:24 p.m. Next meeting: Tuesday, March 3, 2015 — 5:30 p.m. — Hazelnut Conference Room Committee Chair Approval Minutes by LH 55