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Home My WebLink AboutReg 2018-11-05 Item 5A - Agreement - Parcels A and B Purchase and Sale Agreement with Tukwila Village Development Associates for $2,211,600COUNCIL AGENDA SYNOPSIS 449,01, ,4,10 ,11f/,01, lft,,400i4 40,4µ 'itAgt°41'i 404pg,;11, Initials Meeting Date Prepared by Mayor's revie? Council review 11/05/18 DCS IA, ITEM INFORMATION ITEM No. 5.A. STAFF SPONSOR: DEREK SPECK ORIGINAL AGENDA DATE: 11/5/18 AGENDA ITENI TITLE Tukwila Village Land Sale for Phase 2 CATI,GoRy Z Discussion Mtg Date 11/5/18 I Motion Dale 11/5/18 E Resolution Mi:_gDate E Ordinance Altg Date E Bid Aniard Mtg Dale LI Puh/i Hecirint; Mt y Date El Other Alts Date !Wig SPONSOR Counci l Mayor FIR MDCD EFinanee IIJFire TS 1111)&R Police Pw/ Court SP ONtiole S The Administration seeks Council approval to enter into a purchase and sale agreement to SUMMARY sell remaining parcels Tukwila Village land (known as assessor parcel numbers 152304- 9242 and 152304-9322, totalling approximately 2.99 acres) to Tukwila Village Development Associates, LLC for a price of not less than $2,211,600. The financing application is on a tight timeline, with action requested 11/5/18. RINIFWI,I1) BY ril GO.W. Mtg. E CDN Comm E Finance Comm. El Public Safety Comm. E Trans &Infrastructure Arts Comm. Ill Parks Comm. E Planning Comm. DATE: commrrrEE CHAIR: RECOMMENDATIONS: SPONSOR/ADMIN. Commiliu: Mayor's Office No committee due to tight timeline COST IMPACT / FUND SOURCE EXPFINDITURE RF:QUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $0 $0 $0 Fund Source: Comments: This would generate over $2.2 million in one-time revenue. MTG. DATE RECORD OF COUNCIL ACTION 11/5/18 MTG. DATE ATTACHMENTS 11/5/18 Informational Memorandum dated 10/3/18: Attachment A: Site Plan Attachment B: Lot Consolidation Map No. L13-021 169 170 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: City Council FROM: Derek Speck, Economic Development Administrator CC: Mayor Ekberg DATE: October 30, 2018 SUBJECT: Tukwila Village Land Sale: Final Phase ISSUE The Administration seeks Council approval to enter into an agreement to sell two parcels of the Tukwila Village land to Tukwila Village Development Associates, LLC. BACKGROUND On October 22, 2012 the City Council approved a Disposition and Development Agreement (DDA) with Tukwila Village Development Associates, LLC (TVDA), the project developer for Tukwila Village. That agreement outlined the relationship between the City and TVDA and provided for numerous future steps, including sale of Tukwila Village land to TVDA. Since 2012 the project partners have completed many tasks related to the project. All of the partners agreed on easements for access and parking. The City vacated 41st Avenue South, sold a parcel of land to the King County Library System (KCLS), consolidated twenty lots into five, approved a development agreement, approved parking determinations, and approved multiple applications for design review, grading, and building permits. KCLS designed and built a library. TVDA demolished buildings, graded the site, installed utilities, and completed construction on the first phase (two apartment buildings, a cafe and a plaza). The City entered into a purchase and sale agreement with TVDA for the first phase land sale in August 2016 and closed escrow on the purchase in July 2017. TVDA has now completed construction on that phase is ready to construct the final phase, which comprises Buildings A and B (see attached site plan). As such, TVDA recently applied for financing from the Washington State Housing Finance Commission. In order to complete its application, TVDA needs to provide a copy of a purchase and sale agreement to the Commission within the next two weeks. TVDA notified the City of the application submittal on October 19th and the Council's November 5th meeting was the first feasible opportunity to request Council approval. Under current design, Building A will have 79 residential units, four live/work units, and 8,312 square feet of commercial space. Building B will have 125 residential units and 2 live/work units. 171 INFORMATIONAL MEMO Page 2 DISCUSSION The proposed deal terms carry out the intent previously outlined in the DDA and are basically the same as were in the purchase and sale agreement for the first phase. The key provisions are: Property: The land proposed for sale are Parcels A and B of Lot Consolidation L13-021, also known as county assessor parcel numbers 152304-9242 and 152304-9322, respectively (see Attachment B). These lots comprise 130,167 square feet, or about 2.99 acres. This is approximately 49% of the Tukwila Village site (including the library parcel). Price: The final price will be set based on a financial model called a residual land value analysis (RLV). The RLV will take into account the project's costs (including pre -development, construction, financing, and fees), revenues, and a market capitalization rate to calculate how much the project can afford to pay for the land. That result becomes the price for the land. If the calculated land price is below a minimum then TVDA would pay the minimum price. The minimum price is based on a formula of $10,000 per housing unit plus an equivalency for commercial space. Based on the current designs of Buildings A and B, the minimum price for the two parcels will be $2,211,000. Before the close of escrow, TVDA will provide the RLV which may justify a higher price. Preconditions: The P&S will include many pre -conditions that must be met before the money and deed are exchanged and escrow closes. The conditions will include those that are typical of real estate transactions such as clearing up title issues, providing title insurance, providing environmental documentation, etc. The conditions will also include some significant ones to protect the City's goal of making sure that TVDA completes the project as intended. Those are: • Evidence of Available Funds: TVDA will provide written proof of sufficient financing (equity and loans) to complete the project. • Construction Contract: TVDA will provide a construction contract so that it is clear the project can be completed within the amount of available financing. Assignability: TVDA plans to form a different limited liability company or limited partnership for each land purchase primarily to facilitate financing. TVDA will be the managing member or managing general partner, respectively. To accommodate this, the P&S needs to be assignable to an entity that meets City approval. Age Restrictions: TVDA will develop Buildings A and B such that they meet the State criteria as senior housing but they will be the type that would allow up to 20% of units to be rented to households of any age. This would enable up to 40 apartments in this phase to be rented with no age restriction. Income and Rent Restrictions: TVDA would dedicate 20% of the residential units for households earning up to 50% of area median income (AMI) with rent set at affordable rates. Currently, a two -person household earning up to $51,360 annually would qualify. TVDA is likely to dedicate another 30% of the units to be affordable to households earning up to 80% of AMI ($68,480 for W:\2018 Info MemoslTukViiLandSale.doc 172 INFORMATIONAL MEMO Page 3 a two -person household). The City would require at least 50% of the residential units have no income and rent restrictions. If Council authorizes the Mayor to execute a P&S, the next steps are: (1) City and TVDA complete and sign the P&S in early November (2) Developer receives approval from Washington State Housing Finance Commission (3) Developer completes pre -conditions (4) Close escrow (estimated for March 2017) FINANCIAL IMPACT If completed, the proposed land sale will result in revenue to the City of at least $2,211,600. RECOMMENDATION The Council is being asked to authorize the Mayor to execute a purchase and sale agreement to sell Parcels A and B of Lot Consolidation L13-021 to Tukwila Village Development Associates, LLC for a price of not less than $2,211,600. Due to the timing needed for the financing application, Council is asked to consider and approve this item at the November 5, 2018 Regular Meeting. ATTACHMENTS -Attachment A: Site Plan -Attachment B: Lot Consolidation L13-021 Map W:\2018 Info Memos\TukVilLandSale.doc 173 174 PARKAN0 LEGEND ® NUMBER OE STALLS IN ROW c COMPACT STALL THE SAMARA APARTMENTS AFEESTRukCONNECTION 9014E TIP. 00 BUILDING A SITE PLAN - SHEET P2.0 w : T'E a.c PERIMEIFA PENN E 16016IP.AANT PLANTING 5 CWKK) TUKWILA VILLAGE PARKING hG794ANDY COURT APARTMENTS wm TYPE It LANDSCAPE PEAMETFP LIP KA910.—r»IG OUTLINE_ TIP. t, BUILDING A UNITS - 84 GARAGE PARKING STALLS - 85 PHASE 1 PHASE 2 PARCEL PARKING GARAGE =85 SURFACE = 93 TOTAL =138 PARCEL C PARKING GARAGE =0 SURFACE =11 TOTAL = 11 L18RARY- PARCEL D SHARE PARKING ON PARCELS AB,C PHASE 1 TOTAL = 149 STALLS PARCEL E PARKING GARAGE = 49.80 = 129 SURFACE =29 SURFACE(KCHA) =19 PRASE TOTAL = 176 PHASE PARCEL B PARKING GARAGE _86 SURFACE =34 PHASE 3 TOTAL = 120 S. 144TH ON STREET PARKING = 16 STALLS SITE TOTALS = 445 • 18 (KCHA) = 463 STALLS lMDcrG STALL PLAZA SITE PLAN - SEE SHEET P3 0 BUILDING B UNITS -125 GARAGE PARKING STALLS - 86 S 1448/ STREET UWOSCAPE PLAN SEE SHEET P330 OVERALL SITE PLAN RIVERTON TERRACE The 168= ARTwa4 s® *Amy numenumerousm. M memMx C Use Arasrmme<ty. MANNA. h avo.-a9r: eYANENI4 th11rt the cos.he FAA=959 smis44+T 4AewnetArum tech xedti 018= da Ese krr.,w Amor.. of Me Pam* a No km N rata. on a schedule /A.,.%ed be a raehinalor t...yma.y ad srmarmr. PEGS P,Nr CONNECTICAt MXNE Pr? FIRE ASSESS LAOO The Vdlege ARTWBIk form art NRM2 aM OIsmogrA>rry crates 6Aeeeanrc u wal N atornacK9 Q44fe4n vabge- AITrat as memmt art, 9p49twe aM various Mmex teprelemed'm tha mrtmm0'. The CAN., aae other k n r as an womarsn am, ASTv. guide N*Mnes can be pc4ora4 for ofthe art ota4,Pure ro4,w, the rtiatr. created8Bm. Thericr aaww.a the ommunay maim Rm. The wort. MANIAva. P LM USE. sONG xa3swG rt.E xan BUILDING E UNITS - 124 GARAGE PARKING STALLS - BO 4C11.5.44YE STALL tx06R 44414E �1TLuc.. t.r. EAST. NLNIMIG TO � QeMM1 O WAIF TYPE ^CAPF PE9HETEP PEDESTRAn 4aa.CPON ROWE TIP. GREAT BEAR MOTOR 64N U eme macuc r c. ta1113 FILENAME 8Ail3T-PIL DRAWN , CP.MS OVERALL SITE PLAN B., ...trr. l 1 City of Tukwila Depatbrwg of Congenamlly 13..4414present 6300 5o.0M Bprwsna hang* WA 96144 144464sen• (2661431-3670 FAX (206) 431-3665 LOT CONSOLIDATION NO. L13--021 fD CO 1 baistr aast 11 t--?N a eA 8. 144TH STREET{3 if R NEW LOT CONFIGURATION & EASEMENTS COM otXA 1s l:Crt 1.1 yae.4 gym. aac� — — 16315 810 660.4.1 KM, a vow 025)251-4222 (aaeta1 F44. as oacoma. uee VOL(-ms PG. j4Z) SCALE I Y-WO PIN OF THE SE1/4, OF THE SW1/4 OF SEC. 15, TOWNSHIP 23 NORTH, RANGE 4 EAST, W.M. CITY OF TUKWILA, KING COUNTY, WASH NGTON 00