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HomeMy WebLinkAbout12-13-07 Special Session MINUTES OCOEE CITY COMMISSION December 13,2007 at 5:00 P.M. COMMISSION MEETING SPECIAL SESSION IA~uroo~rn I Mayor Vandergrift called the special session to order at 5:00 p.m. in the Commission Chambers of City Hall. Deputy City Clerk Sib bitt called roll and declared a quorum present. Roll Call: Commissioner Anderson, Commissioner Johnson, Commissioner Keller, Commissioner Hood, and Mayor Vandergrift. Also Present: City Attorney Rosenthal, City Manager Frank, Assistant City Manager Croteau, Police Chief Reffett, Deputy Police Chief Goclon, Finance Director Horton, Senior Accountant Brosonski, Randy June, Jimmy Dunn, Ocoee Resident Rosemary Wilsen, and Deputy City Clerk Sibbitt. I A. PUBLIC HEARING 1. PURCHASE OF 646 OCOEE COMMERCE PARKWAY FOR NEW POLICE STATION. (City Manager Frank) At the September 4th Commission Meeting the City Commission considered purchasing the property at 646 Ocoee Commerce Parkway for the new Police Station. At that time the asking price for the property was $3.6 million. However, from discussions with the property owner and/or their attorney it was unclear if the City could actually get the property under contract for that price or if the City would have to incur greater costs by pursuing the property through condemnation. The July 2007 property appraisal indicated that the value of the property was approximately $2.6 million. Personal property (Office furnishings) will be conveyed with the property and the value to the City of the furnishings is approximately $200,000. Assistant City Manager Croteau gave a brief background summary and stated that recently, Floriday Properties, Inc. entered into a Sales and Purchase agreement with Ocoee Partners, Ltd., to purchase the property for $3.5 million. That price includes both the real and personal property. Floriday has put down a $10,000 deposit and is due to deliver an additional deposit of $240,000 on December 20, 2007. The entire $250,000 deposit will be at risk and non-refundable if the City does not complete the transaction and close on the property. Floriday has been coordinating with the City Manager and has agreed to assign the contract to the City, subject to the approval of the Seller. The consideration being paid to Floriday for the assignment is $100. The property is being purchased as is and with minimal representations. The contract is scheduled to close on February 15,2008. Assistant City Manager Croteau further stated staff believes the purchase of the property would benefit the City. This is one of the few existing properties that could easily be converted to a Police Station at a relatively minor cost. The site provides space for future expansion and is centrally located within the City limits and the Community Redevelopment Area. It also would alleviative the City going forward with the development of a new station at A.D Mims and Clarke Road at a cost of approximately $8 million. Lastly, staff recommends Commission approval and execution, by the Mayor, of the Purchase and Sale Agreement for 646 Ocoee Commerce Parkway. Staff further recommends the Commission direct staff to deliver by December 20, 2008, a check in the amount of $240,000 to be escrowed for the purchase of the property and to reimburse Floriday Properties, Inc. $10,000 for refund of their original deposit. Page 1 of3 City Manager Frank clarified the statement above given by Ms. Croteau and said they would not be sending a check but would wire the money and the time frame may be a little sooner. City Attorney Rosenthal reminded the Commission that the City did an appraisal on the real property (not including the personal property on the site) as of July 17, 2007, and the property appraised at $2,590,000. The City has the ability to purchase property in excess of the appraised value so there are no legal restrictions that would preclude the City from moving forward. He further stated there were some revisions made to the Purchase Contract on Section 6A where there is a blank for reimbursement they would be putting the dollar amount of $5000. Mr. Rosenthal further explained that at the City's request, Mr. Randy June with Floriday Properties, Inc. has gone ahead and ordered an environmental assessment and survey that the City would be reimbursing him for as well as reimbursing him for any other out-of-pocket expenses he may incur. He stated that the contract is structured so that it is assignable, but only at the consent of the seller. There is a possibility the seller won't give consent. If we cannot move forward with this contract assignment, Floriday would close with seller and would have a simultaneous closing with the City. The Escrow is arranged so our funds would be used for the closing between Floriday and Ocoee Partners, Ltd., and everything would be in escrow so the City would be protected in that regard. If the seller were to breach the contract by backing out of it, the agreement is written so the deposit is returned directly to the City rather than to Floriday. Mr. Rosenthal said he wanted to make sure the Commission understands that, if they approve this agreement today, the $250,000 deposit paid by December 20,2007, is at risk and non-refundable. There is no recourse if they find something about the property they don't like or should they change their mind. Mayor Vandergrift inquired as to why an environmental assessment was needed on the property. Assistant City Manager Croteau stated the inspection report did come in from the environmental assessment and there was one note which was not an uncommon note that stated the adjoining property had a CSX rail line on it which can sometimes cause some chemicals on the property. They had the same assessment on the A.D. Mims property where the new police station is proposed. Further discussion ensued with the Commission, City Attorney Rosenthal, and Mr. June regarding what risks the City would be taking, how much money the City could lose if the sale do not go through, and how a double closing would have to occur if the seller refused the assignment of the property. Before the Public Hearing was opened, City Attorney Rosenthal further explained the reasoning for asking for an assignment and stated since this is a public hearing and is reported in the newspaper, then they need to assume that the owners of the State Farm Property are aware of what is happening. Mayor Vandergrift opened the Public Hearing. City Attorney Rosenthal stated that there is one additional provision that he would like to add to the contract that he had spoken to Mr. June about. Mr. June thinks that the property is worth more than $3.5 million and that he can get an appraisal that would state it is worth more than $3.5 million. He has asked if he could document from an IRS standpoint that the property is worth more than $3.5 million and have the City sign an IRS tax form calling any excess value a donation to the City; this would not have any legal liability to the City. Mr. Rosenthal stated he did commit to Mr. June that, as long as they are not committing any fraud or exposing the City to any liability and he puts the paperwork together, the City would not have any problems signing the form. Mr. June informed the Commission that he just sold a building shell for over $3.5 million about 30 days ago on the other side of town and if they use that comp, verses the appraisal the City has, it should increase the value of this building with the build out. He said adding this provision is not a deal breaker; he just wanted to throw that suggestion out there. Mayor Vandergrift stated that he had always wanted to move forward with the building and was sorry that they had stopped negotiations. He inquired if the provisions mentioned had to be done before closing and if they had to close on February 15th. City Attorney Rosenthal stated closing would probably not be done before December 31 st but could be closed before February 15th should they choose to close sooner. Page 2 of3 Commissioner Keller said he is in favor of this purchase, as long as they are still obligated to sell to Floriday, even if they refuse the assignment. Mayor Vandergrift closed the Public Hearing. Commissioner Keller. seconded by Commissioner Anderson. moved for approval and execution. by the Mayor and City Clerk. of the Purchase and Sale Agreement for 646 Ocoee Commerce Parkway with authorization to deliver the deposit in accordance with the terms of the contract and with the changes discussed previously by the City Attorney and a change the date in Section 2(A) from. ".. .prior to December 31. 2007." to ".. .prior to January 31.2008". No vote taken at this time due to subseauent discussion. Mayor Vandergrift asked about self-illuminated exit signs. Mr. June explained his findings. Commissioner Hood inquired what the cost would be to bring the building up to par. City Manager Frank stated for the first year there will only be minor changes that they would need to make. The building is about 98% ready. Assistant City Manager Croteau said that they need to add showers, evidence lockers, and enhance the security of the building, but the estimated $500,000 is still well below the $8,000,000 needed for a new building. Commissioner Hood stated that it should probably cost over $4.5 million to purchase the building since there are other fees such as closing costs that would be added. Assistant City Manager Croteau stated the closing fees should be approximately $40,000. City Attorney Rosenthal stated it may even be less if they get the assignment because the cost would be split 50/50. If they do not get the assignment, then they would pay the Buyer's half and their whole amount. City Manager Frank added there is CRA money they could utilize but it would be whatever the CRA Board allocates. Commissioner Hood further inquired as to what is going to happen in four years when the Police Department out grows that station. Assistant City Manager Croteau stated she believes the police station will last a good 5-7 years. She further stated the layout is very open and the way the property is situated they can easily add an addition if needed in the future. Commissioner Hood further stated he did not understand why they could not go into the building to get a look at it. Commissioner Hood was advised that the building was accessible for him to view and staff along with the rest of Commission did get to go inside the building. Commissioner Hood inquired as to how the cost was figured out for the furniture. Assistant City Manager Croteau stated they had thought they were going to have to buy new furniture but when they went into the building all the furniture in the building was usable. Commissioner Hood voiced his opinion on the appraisal. Mayor Vandergrift apologized to Commissioner Hood for not knowing he had not seen the building and reassured him the building can last longer then 10 years. He further stated it is an 18,000 square foot building and is very spacious. Commissioner Keller added that the building was buildable up and out. He further stated it already looks like a police station with some minor changes that will be needed. Further discussion ensued regarding the appraisal of the building and the benefit of a newly renovated police station verses waiting to have a new station built in a couple of years. After the discussion. the motion carried 5-0. The meeting was adjourned at 5:45 p.m. Attest: APPROVED: City ofOcoee ;;3~~ /' Page 3 of3