David L. Hurt owns a parcel approximately 3 acres in size (APN 516-281-03) identified in Exhibit A; it is currently zoned A-5.  The city owns the adjacent parcel to the south (APN 514-081-01, approximately 1.2 acres in size) identified in Exhibit B and currently zoned PF (Public Facility).  The city’s property has direct access to Disc Drive while the Hurt property has access only via an easement across the city’s property.  The proposed agreement allows for only a common buyer for both properties during the term of the agreement.  The combined properties are anticipated to be a site for multifamily residential development.  The city entered into similar agreements with Mr. Hurt in the past but both of the previous agreements lapsed without any interested buyers.  Mr. Hurt has now entered into negotiations with a potential buyer and would like to re-establish an agreement to give the potential buyer an opportunity to apply for and potentially receive any and all land use entitlements necessary to develop the combined property.

The city and Hurt properties will be sold together or not at all during the term of this agreement.  Combining the two properties and pursuing any needed entitlements will be the responsibility of the buyer and is to be accomplished during the term of the agreement.  The city and the buyer will negotiate a Purchase and Sale Agreement during the term of this agreement.  The Purchase and Sale Agreement will be brought to City Council for consideration and possible approval after this agreement is in place.

The city and Hurt will enter into separate but concurrent closings with the buyer. The price for the city property will be determined by the city receiving summary and review appraisal on the city property.  The city would receive from the sale proceeds an amount equivalent to the appraised value of the city property minus the city’s share of closing costs and escrow fees. The city would not pay any portion of the real estate broker commissions associated with the sale of these properties. The term for this agreement is 250 days unless extended by mutual agreement of both parties.

The City Council’s alternatives include: (a) rejecting the agreement; (b) requesting changes to the proposed terms of the agreement; (c) providing alternative direction to staff.

I move to approve the agreement to cooperate in the sale of city owned property with David Hurt.