HomeMy WebLinkAboutRes2014-059 Sponsored by: Hunt
him CITY OF SEWARD, ALASKA
RESOLUTION 2014-059
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, ENTERING INTO A PURCHASE AND SALE AGREEMENT
("AGREEMENT") BETWEEN THE CITY OF SEWARD AND THE
FRIENDS OF THE JESSE LEE HOME, DISPOSING OF PROPERTY AT
LESS THAN FAIR MARKET VALUE TO A NONPROFIT
CORPORATION, FOR LOTS 15A AND 15B, JESSE LEE HOME
HEIGHTS SUBDIVISION ADDITION NO. 4 ACCORDING TO PLAT 89-
18, FOR USE AS A PUBLIC EDUCATIONAL AND RESIDENTIAL
BOARDING SCHOOL
WHEREAS, the Seller owns the Jesse Lee Home property ("Property," defined below)
that is the subject of this Agreement; and
WHEREAS, since 2005 the Buyer has been working pursuant to City of Seward
Resolution 2005-01 and City of Seward Resolution 2005-83 to obtain funding for the
rehabilitation and development of the Property as an educational and residential/ boarding
facility; and
£` WHEREAS, Buyer has already coordinated valuable improvements to the Property,
including but not limited to Structural Stabilization, Roof Protection & Repairs, Phase I
Environmental Assessment, Hazmat Study, Surveying, Structural Analysis and Architectural
Design; and
WHEREAS, the property was appraised by MacSwain Associates LLC. in 2011 and the
two parcels were valued at $470,000 for the raw land; and
WHEREAS, since repossessing the property in 2001 the City has paid $264,958 in back
taxes and utility assessments, plus untallied administrative, maintenance and risk control costs;
and
WHEREAS, the assessed value of the property has decreased over time as the property
has deteriorated; and
WHEREAS, Buyer has supported $33,125.51 for the Environmental Study, Hazmat
Study, and survey work and has agreed to provide additional improvements totaling $290,750 as
consideration toward the purchase of the property; and
WHEREAS, the Buyer wishes to acquire, rehabilitate and develop the Property for use
as a public educational and residential/boarding school; and
WHEREAS, the Buyer intends to submit an application to the Kenai Peninsula Borough
School District for a charter school; and
CITY OF SEWARD, ALASKA
RESOLUTION 2014-059
WHEREAS, the Property requires significant physical improvements to be used for such via
purposes, and such uses also require that governmental permits and approvals be granted; and
WHEREAS, development of the Property by the Buyer as an educational and
residential/boarding school will be a public benefit; and
WHEREAS, the educational and residential/boarding school will have a net positive
economic development impact for the community including short and long-term employment;
and
WHEREAS, Buyer is uniquely situated and able to redevelop the Property; and
WHEREAS, it is in the City's best interest to dispose of these properties in the manner
described in the attached Purchase and Sale Agreement, to transfer the risk and liability of the
abandoned Properties and the responsibility for necessary site hazardous materials disposal and
abatement to the Buyer.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA that:
Section 1. The City of Seward hereby authorizes the City Manager pursuant to SCC
7.05.120 and 7.05.150 to execute the Purchase and Sale Agreement for the sale of properties
referenced as 15A and 15B, Jesse Lee Heights Subdivision Addition No. 4 according to Plat 89-
18, Seward Recording District, Third Judicial District, State of Alaska to the Friends of the Jesse
Lee Home for less than fair market value.
Section 2. The Friends of the Jesse Lee Home agree to complete at least $290,750 in
future long-term site improvements and to pay all closing costs and fees for said property as
consideration to the City for the properties.
Section 3. The Seward City Council finds the disposal of these properties as described in
the attached Purchase and Sale Agreement to be in the best interests of the citizens of the City of
Seward and that the public interest will be served by disposing of the property interest for less
than the appraised fair market value, in accordance with the recitals above which are
incorporated herein.
Section 4. This Resolution shall take effect thirty (30) days after passage and posting.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 28th day of
July, 2014.
1
CITY OF SEWARD, ALASKA
RESOLUTION 2014-059
THE CITY OF SEWARD, ALASKA
EP'a'')/(J Ait teYeet2,021.,
can Bardarson, Mayor
AYES: Keil, Casagranda, Terry, Squires, Butts, Darling, Bardarson
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
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ketit #4 i
J s hanna Ki C
C ty Clerk ,
(City Seal)
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Council Agenda Statement
Meeting Date: July 28, 2014
Through: Jim Hunt, City Manager sky IF sett,
From:
Ron Long, Assistant Cit
& Community q �;P
Development Director ►5K
Agenda Item: To enter into a purchase and sale agreement
between the City of Seward and the Friends of the Jesse Lee Home,disposing of
property at less than fair market value to a nonprofit corporation, for lots 15A
and 15B,Jesse Lee Home Heights Subdivision Addition No.4 according to Plat
89-18
BACKGROUND USTIFICATION
The Jesse Lee Home is listed on the National Register of Historic Places and has been identified
Seward Historic Preservation Commission,Planning and Zoning Commission un the
and the State of Alaska as a property that should be preserved and rehabilitated.The C tytof Seward
acquired the Jesse Lee Home property through a foreclosure action in 2001 after previous private
preservation efforts failed. The Friends of the Jesse Lee Home (FJLH) was formed to preserve the
property as an education facility and has since worked to obtain funding for the rehabilitation and
development of the Property and to develop a business model that can sustainably operate the property
as an educational and residential/boarding school.
The property was appraised by MacSwain Associates LLC in 2011 and the two parcels were valued at
$470,000 for the raw land. The Kenai Peninsula Borough assesses the properties' value at $193,500.
The City's cost basis in the property is $264,958 paid in back taxes and assessments, plus untallied
administrative, maintenance, and risk control costs. FJLH has coordinated $33,125 in environmental
studies, HAZMAT assessments and survey work that estimate the costs of HAZMAT abatement at
$216,000. Actual costs may be more, and other costs would be necessary to make the property
marketable for other uses.
FJLH wishes to acquire, rehabilitate and develop the Property for use as a public educational and
residential/boarding school. The Friends of the Jesse Lee Home intend to submit an application to the
Kenai Peninsula Borough School District for a charter school.The Property requires significant physical
improvements to be used for such purposes, and such uses also require that governmental permits and
approvals be granted.
The City recognizes that in its current state the property is more of a liability than an asset to the City,
and that FJLH is uniquely situated as the most likely entity to bring the property back to a viable state
that will restore the public purpose and maintain the historic significance of the property.
FJLH has coordinated significant funding towards the project,has done considerable architectural and
engineering work already, and now needs to gain site control before beginning the major work of
restoration and development. Yet more funding is needed to complete the project;FJLH will exhaust all
efforts to ensure the project succeeds but there is no guarantee that a source can be found or that the
project will actually be completed.The Friends of the Jesse Lee Home and the City administration have
negotiated the attached Purchase and Sale agreement that attempts to further the Friends' objectives and
the City's desire to see the project succeed but at the same time ensure that if it does not,that the City
1
will at least take back ownership of a developable and sellable property.
The agreement prioritizes the HAZMAT abatement and environmental cleanup work and reasonable timeline to complete that work. The City receives no cash in this agreement,and this is provides l a
than fair market value transaction. As consideration, the City accepts the $290,500 s is planned
less
improvements as described in the Purchase and Sale Agreement, at the timeline benchmarks of therein,
be of good value and in the public's interest. Additionally, a reversionary clause endures arks therein, e
project to ensure that if the property is used for any purpose other than that which the accepts with as a
condition to the transaction (use as a public educational and residential boarding school), h a
goes back to the City. g ), ownership
Development of the Property by the Buyer as an educational and residential/boardin
g facility will be a
public benefit. The educational and residential/ boarding school will have a osi
development impact for the community including short and long-term employment. T he Friends of the
Jesse Lee Home is uniquely situated and able to redevelo the Pro Y p true economic
p party.
This Agreement is in the city's best interest to dispose of unused land and provide
improvements to make the property an asset to the community and not a continuing liability. ary site
g
INTENT: To dispose of property at less than fair market value as described in the Res
Purchase and Sale Agreement. Resolution and
CONSISTENCY CHECKLIST:
Yes No N/A
(p. 9)
Comprehensive Plan 9):Cultural Facilities - Options refurbishing the
1. Jesse Lee Home per Historic Structure Report; 3.9.1.2—Encourage the X
reco'nition, rehabilitation and •reservation o ...historic structures...
2. Strategic Plan (document source here):
■ X
Other(list): SPHC, P&Z and
III
■
d City Council Resolutions of support;
National Register of Historic Places listing X ■
■
FISCAL NOTE: No money changes hands in this transaction. The Friends of the Jesse Lee Home
agrees to pay all closing costs and fees. The City has written off the costs to acquire the property in
previous budgets. Transfer of ownership will reduce the City's liability for an attractive nuisance
property. Ownership by a non-profit entity will maintain the tax-exempt status of the property.
Approved by Finance Department:
ATTORNEY REVIEW: Yes X No
RECOMMENDATION:
To authorize the City Manager to execute the Purchase Agreement for the property referenced as 15A
and 15B, Jesse Lee Heights Subdivision Addition No. 4 according to Plat 89-18, Seward Recording
District,Third Judicial District, State of Alaska with the Friends of the Jesse Lee Home as a less than
fair market transaction in substantial form as described in the attached Purchase and Sale agreement to
facilitate the use of the property as a public educational and residential/boarding facility.
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