Fort Walton Beach Council agenda — 08-20-13--surplus properties — reading text

L1. The City of Fort Walton Beach owns a parcel at 235 Hollywood Boulevard NW. In 2011, this property was cleared and now sits vacant. During hurricane season, this parcel serves as one of the City' s debris removal storage sites. 1. 2. The 3. 81 - acre parcel ( Parcel ID No. 14- 25 -24- 0000 -0013 -0020) is currently undeveloped with an Existing Land Use Classification of Mixed Use High. The Future Land Use Classification of the parcel is Mixed Use. 2. DISCUSSION: 2. 1. With the initiative to evaluate City-owned properties, Staff and the City Attorney developed a checklist for the disposition of surplus property. The first step in the process is for the City Manager to submit a report and recommendation to determine whether the property can be declared surplus. If City Council determines the property as excess property, an appraisal is required along with the manner in which the excess property will be disposed of 2. 2. Staff has evaluated the parcel at 235 Hollywood Boulevard NW and has determined that the City has no existing or future development plans for the property. 2. 2. 1. Staff would also recommend the method of disposition as a Request for Proposals for prospective purchasers. 23. If approved as excess property by City Council, Staff will proceed with advertising the competitive solicitation of the property. 2. 3. 1. Upon receipt of the proposals for the parcels, the proposals will be evaluated and a recommendation on which proposal to accept, if any, will be brought back to City Council for review and approval. If the sale is approved by City Council, an ordinance conveying the land is required. 3. FINANCIAL INFORMATION: 3. 1. NBI Properties, the City' s real estate broker, performed an evaluation of the property to determine a preliminary fair market value of the property. In their report, NBI evaluated similar properties in order to estimate a fair market value. Based on the evaluation, a Conservative, Average, and Aggressive fair market value price was Page 1 of 2  s5 proposed based on 165, 964 SF of usable space. 3. 1. 1. Conservative Fair Market Value = $ 4. 10 / SF or $680, 452. 40 3. 1. 2. Average Fair Market Value= $ 6. 10 / SF or $ 1, 012, 380.40 3. 1. 3. Aggressive Fair Market Value= $ 8. 10 / SF or $ 1, 344, 308. 40 3. 2. NBI recommends the best use of the property as commercial development. The current zoning would allow for a mixed use development that could coincide with the construction of the recreation complex. 3. 3. NBI also recommends the method of disposition as a sale but also recommends holding onto the property for twelve months to allow for the new recreation complex to be further along in construction, which could potentially increase the property value of the parcel. Leasing the property could be an option in the interim. 3. 4. There will be costs associated with advertising the competitive solicitation for the purchase or lease of the property. 3. 5. It is estimated that the cost of the appraisal and the legal advertisements will not exceed $ 5, 000. The cost of the appraisal and the legal advertisements is available in the FY 2012 -13 General Fund Balance. 4. RECOMMENDATION: 4. 1. Staff respectfully recommends City Council declare Parcel ID No. 14- 25- 24 -0000- 0013 -0020, a 3. 81 - acre City -owned parcel located at 235 Hollywood Boulevard NW as excess property in accordance with Chapter 2. 00. 05 of the City' s Code of Ordinances. 4. 2. Staff also recommends City Council authorization to issue a Request for Proposals along with the proper legal advertisements to obtain competitive proposals to purchase or lease the property. ATTACHMENTS: Disposition of Surplus Property ( PDF) NBI - 235 Hollywood - 8 -20 -13 ( PDF) SIGNATURE BLOCK: Carole Jones Completed 08/ 13/ 2013 4: 04 PM Carole Jones Completed 08/ 13/ 2013 4: 04 PM City Manager Completed 08/ 15/ 2013 12: 23 PM City Council Pending Page 2 of 2  Sz a, DISPOSITION OF SURPLUS/EXCESS PROPERTY CHECK LIST FOR THE CITY OF FORT WALTON BEACH, FLORIDA 1. The City Manager shall submit a report and recommendation to City Council for review and determination whether the parcel is unneeded for the immediate and future development/ use requirements of the City and should be declared excess. Said City property cannot be in present use or have a future project plan. FWB Code 2. 00. 05 2. The City Council must determine that the City property is excess propertv. FWB Code 2. 00. 051 3. The City Manager shall secure one independent appraisal of the property by appraisers qualified to conduct appraisals for the State of Florida by general law. FWB Code 2. 00. 051 4. The City Council also determines the manner that the excess property is disposed of, including but not limited to sealed bid, auction and negotiated sale. FWB Code 2. 00.051 5. The City Manager shall cause written notice of intent to dispose of property to be sent to abutting property owners, if any, and advertised twice in the legal advertisement section in a newspaper having general circulation within the City; advising the date by which proposals or offers must be received. FWB Code 2. 00.051 6. Once a contract for sale has been negotiated to the satisfaction of the City Manager and proposed purchaser, the City Manager shall cause said contract to be submitted to the City Council for its review and approval FWB Code 2. 00.051 7. The City Council shall review any proposed contract for sale and make a determination as to whether said contract is approved or disapproved. FWB Code 2. 00. 052 S. If the sale is approved by the City Council, then the City Council shall approve by ordinance the conveyance of any land of the City. FWB Code 2. 00. 052 9. Once the City Council approves a contract for sale of excess real property, the subject property may then be sold according to the terms of said contract. FWB Cade 2. 00.052 10. Award shall be made based upon consideration of best price and utilization of the propertv and development for uses benefiting the City and its citizens in the exclusive discretion of the City Council. FWB Code 2. 00.052 11. In order to ensure each proposed purchase for development significantly contributes to the surrounding neighborhood and general needs of the Citv, the City Council reserves the right to place restrictions and covenants in the deed of conveyance which will guarantee accommodation of the City' s public utilities provisions and the public's interest in proper and timely development of the property consistent with City development standards. All restrictions and conditions imposed shall be covenants running with the land, violation of which shall result in reversion of title to the City. FWB Code 2. 00.054  SS.b q("" NB1 Pita P FR7tf5 iNt CWNw e. W0 [ gpu{ piR[ RUl GSU4 August 13, 2013 Michael Beedie —City Manager 235 Hollywood Blvd. Fort Walton Beach, FL 32548 Dear Michael, Thank you for giving NBI the opportunity to provide a Broker' s Opinion to Value ( BOV) c regarding the disposition of the property located at 235 Hollywood Blvd., Fort Walton Beach, FL . 2 32548. Having earned the respect among all the Professionals affecting the Northwest Florida ! Commercial Real Estate Industry, we feel very confident in helping you meet your goals within a o reasonable amount of time. Me Please review our listing proposal and Broker' s Opinion to Value to help with your decision on r, fulfilling your objectives. Keep in mind these are MARKET DRIVEN quotes that will aid in e, your ability to dispose of the property in a more " timely manner," and that all statements and o proposals are open for further discussions and objective reasoning. The Listing Proposal is as W follows: O T03 nMN mz cvE z0uN a  5. 5. b LISTING PROPOSAL FOR SALE The Valuation Method for determining the sales price for the subject property was derived by the Sales Comparison Approach for the like kind properties that have closed in the FWB Market within the last year. Based upon our assessments, we will use the Price Per Square Foot Market Value. When applied to the total approximate 160, 301 square feet of usable land, our initial asking price will start at $ 977,836. 00. Please find the list of comparable properties in the attachments for your review. As you will see, the price per foot ranges from $7. 17 to $5. 03, thus averaging $ 6. 10 per foot for similar properties, which we feel establishes and aggressive base line price per foot value for the Subject Property. Without knowing your timelines for disposition, we would like to submit the current market rate for the Subject Property as follows: TOTAL SQFT FOR SUBJECT PROPERTY: 160,301 SQ FT Price Per Foot: Sales Price: Market: $4. 10 per foot Sales Price: $ 657, 234. 10 BEST USE I feel the highest and best use in the current market conditions is to sell the property for commercial development. The commercial market has improved over the last few years but commercial o financing is still difficult to acquire. There has been an acre of commercial property for sale by AT &T for over three years located across the street from this parcel. The current asking price is r 4.44 a square foot. We can use