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HomeMy WebLinkAboutRes 2119 - Surplus 444 Andover Park E and Alternate Sale Process (Formerly Fire Station #51)City of Tukwila Washington Resolution No. 1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DECLARING THE PROPERTY LOCATED AT 444 ANDOVER PARK EAST (ASSESSOR PARCEL NUMBER 022340-0080) TO BE SURPLUS; AND APPROVING AN ALTERNATIVE SALE PROCESS AS AUTHORIZED BY TUKWILA MUNICIPAL CODE SECTION 2.64.030(4). WHEREAS, the City of Tukwila owns certain property located at 444 Andover Park East also known as assessor parcel number 022340-0080 ("the Property"); and WHEREAS, the Mayor and the City Council find the Property is surplus and no longer needed, and that the sale of the Property is in the best interests of the City and the people thereof; and WHEREAS, Tukwila Municipal Code Chapter 2.64 provides for disposition of surplus property; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Declaration of Surplus. The property, both real and personal, located at 444 Andover Park East and also known as assessor parcel number 022340-0080 ("the Property"), belonging to the City of Tukwila, is hereby declared to be surplus. Section 2. Sale of Surplus Property Authorized. Pursuant to Tukwila Municipal Code (TMC) Section 2.64.030(4), the City Council hereby authorizes the Mayor and/or his designee to engage in the alternative process for receiving offers, negotiating the price of the Property, and negotiating additional deal terms as set forth in the informational Memorandum attached hereto as Exhibit A. Section 3. Council to Review Purchase and Sale Agreement Terms. Prior to execution of a purchase and sale agreement, the mayor and/or his designee shall report to the City Council a recommended purchaser for the property and negotiated terms. 2025 Legislation: Declaring Property Surplus Version: 06/02/2025 Staff: 6. Mikes Page 1 of 2 Section 4. Broker. The Mayor and/or designee is authorized to hire a broker to list, market, and conduct other commercial real estate brokerage activities for the City of Tukwila. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA WASHINGTON, at a Regular Meeting thereof this \k.itV day of V�IfI� 2025. ATTEST/AUTHENTICATED: vW A d Y un-Barrett, CMC, City Clerk APPROVED AS TO FORM BY: 0 ice of the City Attorney" Tosh Sharp, Co II President Filed with the City Clerk:___111%., l Passed by the City Council: � Resolution Number: Attachment: Exhibit A, Informational Memorandum dated May 13, 2025 2025 Legislation: declaring Property surplus Version: 06/02/2025 Staff: B. Miles Page 2 of 2 City of Tukwila Thomas McLeod, Mayor INFORMATIONAL MEMORANDUM TO: Tukwila City Council FROM: Brandon Miles, Mayor's Office CC: Thomas McLeod DATE: May 13, 2025 SUBJECT: Disposition of Old Fire Station 51 ISSUE The purpose of this agenda item is to seek Council approval of the process to sell old Fire Station 51 at 444 Andover Park East. Once the Council approves the process, staff will solicit proposasl and negotiate deals terms. If staff and the buyer(s) agree to deal terms, staff would then return to the City Council requesting authorization to enter into a purchase and sale agreement. BACKGROUND The City owns an 81,000 square foot lot in the Southcenter District of the City that currently has a largely vacant 15,519 square foot building on it. The property was the former home of Fire Station 51 and also served as the headquarters for the City's fire department. As part of the City's Public Safety Plan, the city relocated and constructed a new Fire Station 51 at the corner of Southcenter Parkway and S.180th Street. It has been the city's intention to sell old Fire Station 51 since the City has no short term or long-term needs for the property. After the fire department moved off the site, the city temporarily relocated police evidence vehicle storage into some of the bays at old Fire Station 51. The city is currently working on a final, permanent relocation of the police evidence vehicle storage to a portion of the hanger at the Fleet and Facilities Building. The old Fire Station 51 building has significant issues, including a partial collapse of the roof, stolen HVAC units, and other issues. The building creates financial liability for the City to both maintain and in diverting facilities staff away from other facilities that need attention. As part of the adopted two-year budget, the city included $5 million in proceeds from the sale of the old fire station in 2026 as revenue to balance the city's operating budget. This one-time revenue was intended to serve as a stop gap measure while the city examined fiscal sustainability issues city wide. DISCUSSION The method for selling city owned property is outlined in Tukwila Municipal Code (TMC) 2.64. While the City could call for bids, staff proposes that a more competitive process be used and that City Council authorize, "...an alternative process for receiving offers, selecting a buyer, and negotiating the price..." pursuant to TMC 2.64.030 (4). Staff suggests that a broker be hired to market and represent the city on a potential disposition of the property, like it was any commercial property listed for sale or lease. Formally listing the property for sale and marketing it will likely result in the highest return to the City and make the property disposition known to a wider audience. The site is zoned for Tight industrial and the industrial market in the area is still extremely hot. The City has received two broker's estimates INFORMATIONAL MEMO Page 2 for the property and would lust the property for sale for around $4.2 million1. The City will also consider an entity that is interested in entering into a long-term ground lease of the property (30- 50 years). Staff propose the following general terms for any deal: 1. Highest financial value to the City. The City would consider the total financial value of the property, including the intended user, and what tax revenue the City would receive from the property over a specific period. The timing of receiving funds would be considered as part cf the total financial value. While the City would prefer to receive the bulk of funds for the property in the near term if the city received more funds by delaying closing this would be considered as well, 2. Closing. The City would consider a longer closing period, if it resulted in a better financial offer (see above). If a longer closing is requested, the city would want non- refundable deposits made to the city. If the buyer is unable to close, the Inon-refundable deposits would go to the city. 3. Past Performance by the Buyer. The buyer would need to have a demonstrated history of being able to close the deal with the city and meet the agreed closing date 4. Appraisal. To be conducted by the city after an initial offer is accepted and a signed purchase and sale agreement is in place. 5. Zoning Standards. The city would consider possible zoning changes, provided those changes are consistent with the vision of the Workplace District zoning. Any zoning modifications would require City Council approval, The City would note this in our marketing materials. Staff is not reauestina to enter into a purchase and sale aareement at ths time. Once the city has received sufficient offers and has worked to validate the offers, the City will come back to the City Council with an update and a recommendationon a specific buyer At that time staff will request to enter into a purchase and sale agreement with the proposed buyer. The proposed resolution will: 1. Declare the property surplus; 2. Authorize the sale and city to engage in an alternative process; 3. Outlines the City Council will review the purchase and sale terms; and 4, Authorizes the City to hire a broker (draft agreement is attached) FINANCIAL IMPACT As part of the 2025/2026 Budget the city assumed $5 million in revenue from the sale of the old Fire Station 51 to occur in 2026. The suggested list price of .2 million is below the forecasted revenue. However, this is the list price, and the final price could be higher or lower, RECOMMENDATION The City Council is being asked to forward the draft resolution to the June 16 regular council meeting for possible ad ption. I The. property. has. a. total. value of just nJ..t $4 million_ Howev'er, the listinl price. assunes the, cost of demolition that the buyer will factor when makinq an offer on the. property,