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1 Ogden Redevelopment Agency Meeting: August 22, 2017 TRACKLINE ECONOMIC DEVELOPMENT AREA - Property Acquisition, Tax ID’s #03-005-0003, #03-005-0004, #14-14-0004, 7.34 Acres (Swift Meat Packing Building) Action: Adopt or Not Adopt Resolution Executive Summary The Board will be considering a Resolution authorizing the purchase of the Swift Meeting Packing Building located at 390 W. Exchange Road. Purchase price for the property is $400,000. Extensive environmental cleanup and demolition costs could bring the entire project to more than $2.6 million. The Board has approved funding in the amount of $2,035,000 to date. The property is located within the Trackline Economic Development Area and is adjacent to the Ogden Business Exchange business park. Acquisition of the property will allow clean-up and development of the Weber River, refurbishing of the Kayak Park, and enhancement of a major gateway into Ogden City. Background January 1989 The RDA created the Golden Spike Redevelopment Project Area. City staff hoped to facilitate commercial and industrial redevelopment in the project area. The project did not come to fruition and the City never collected tax increment from the project area. The Golden Spike RDA would have expired in January 2021. April 23, 2013 Based on recommendations from the Administration, the RDA Board terminated the Golden Spike RDA and established the Trackline Economic Development Area with Plan and Budget by Resolution 2013-8. The City Council also passed Ordinance 2013-20 adopting the Trackline Plan and Budget. April 18, 2017 The Board Office received an Administrative Transmittal requesting that the Board approve a Real Estate Purchase Contract (REPC) for purchase ---PAGE BREAK--- 2 Ogden Redevelopment Agency Meeting: August 22, 2017 of 7.34 acres in the Trackline Economic Development Area (Swift Meat Packing Building). After completing a Due diligence review, the Administration determined that the environmental costs would be substantially higher than originally estimated. The Administration informed the Board that they would be working with the seller to renegotiate the purchase price. August 3, 2017 The Board Office received an updated Administrative Transmittal that included the First Amendment to the Real Estate Purchase Contract for the Swift Meat Packing Building. Proposal The Administration has completed negotiations for purchase and environmental cleanup of the Swift Meat Packing property and has negotiated a First Amendment to the Real Estate Purchase Contract. This Amendment modifies the original contract substantially reducing the price to adjust for the cost of environmental remediation. A summary of the amended REPC follows: Seller: Utah-Smith, LC. (Kathy Smith, Manager) Buyer: Ogden City Redevelopment Agency Description: Tax ID #03-005-0003, #03-005-0004, #14- 014-0004, 7.34 Acres (Swift Meat Packing Building) Address: 390 W. Exchange Road, Ogden, Utah Contract Date: April 10, 2017 First Amend Date: July 18, 2017 Purchase Price: $400,000 Terms: Earnest Money (paid) $ 50,000 Balance Due at Closing: $350,000 Closing Costs: Buyer pays all closing costs Commissions: Each party pays 3% Closing Date: August 24, 2017 ---PAGE BREAK--- 3 Ogden Redevelopment Agency Meeting: August 22, 2017 REPC includes an option to extend the Closing Date for one thirty-day period for a non-refundable payment of $5,000 not to be applied to the Purchase Price. Seller Disclosure Deadlines have been fully satisfied. Buyer’s due diligence deadline and review requirements have been satisfied. Total project costs are estimated as follows: Purchase $ 400,000 Closing Costs $ 5,450* Commissions $ 12,000* Enviro Remediation $1,700,000* Demolition $ 500,000* Total Costs $ 2,617,450 *Estimated Board Staff Note: The Administration believes the estimates for cleanup are high and that the total project costs will be about $2.2 million. Funding The FY2018 City and RDA Budget included a transfer of $1,125,000 from the CIP Fund (funded with BDO Lease Revenue) and an Interagency Transfer of $912,000 from the 25th Street RDA to the Trackline RDA for a total of $2,037,000. The $912,000 is the funds originally appropriated for demolition of the Flowers Foods buildings (Twinkie Project). An additional $165,000 is proposed to come from the General Fund fund balance. A budget amendment will be required to provide this additional funding. If approved, the additional funds will bring the total amount available for the project to $2.2 million. Questions 1. Please review the proposed Amended REPC for purchase of the Swift Meat Packing building. ---PAGE BREAK--- 4 Ogden Redevelopment Agency Meeting: August 22, 2017 2. Please provide an overview of the projected long term financial condition of Ogden Business Exchange and the Trackline EDA. Council Staff Contact: Janene Eller-Smith, (801)629-8165 ---PAGE BREAK--- OGDEN CITY REDEVELOPMENT AGENCY TRANSMITTAL Date Received by Admin: Mark Johnson, CAO Date Sent to Board: DATE: July 10, 2017 TO: Ogden City Redevelopment Agency Board FROM: Tom Christopulos, CED Director TC SUBJECT: REVISED – Real Estate Purchase Contract and First Amendment between Agency and Utah-Smith, LC for the purchase of 7.34 acres located at 390 Exchange Road STAFF CONTACT: Brandon Cooper, CED Deputy Director BC LEGAL CONTACT: Melven Smith, Assistant City Attorney MS REQUESTED TIMELINE: See below RECOMMENDATION: Administration recommends approval of the terms and conditions of the REPC and First Amendment by resolution DOCUMENTS: REPC; First Amendment; Resolution Background The Redevelopment Agency has been successful in negotiating a real estate purchase contract for approximately 7.34 acres located at 390 W. Exchange Road, Ogden, Utah. The proposed transaction provides an opportunity for the Agency to bring about development that will reduce existing blight/vacancy and have a significant impact to the West Ogden neighborhood and the 24th Street Corridor into the Downtown. A summary of the Real Estate Purchase Contract is as follows: • Seller – Utah-Smith, LC • Property – 03-005-0003; 14-014-0004 • Size – 7.34 acres • Purchase Price – $400,000 • Earnest Money – $50,000 (applicable to Purchase Price) • Cash at Closing - $350,000 • Closing Date – August 24, 2017 Benefit ---PAGE BREAK--- This site is adjacent to the historic Ogden Union Stockyards and is the home of the defunct Swift Meat Packing Plant. It has most recently been used by Smith & Edwards as an indoor and outdoor storage facility. At the time Smith & Edwards took occupancy of the property (date unknown), it had already been vacant and in disrepair for many years. The property is along the 24th Street Corridor, the main entrance into the downtown, and presents a poor image of the city and is a burden to the West Ogden neighborhood because of its vacancy and unsightliness. It is located within the Trackline Economic Development Project Area. There are currently two structures upon the property that are actually multiple buildings scabbed together over many decades. Neither of the structures are habitable due to years of deferred maintenance, disinvestment, and neglect. The site is overgrown and full of scrap, debris, and other undesirable materials. The intent of the Agency is to remove the structures and site improvements through demolition as soon as budget allows. The current owner is a willing seller and desires to see the property redeveloped into a productive use. RDA control through property acquisition is a crucial strategy in the effort to recruit and support the appropriate development team and drive development that is in harmony with the overall plans and objectives of the West Ogden Community Plan. Additionally, ownership of the property will allow the City to adjust property lines along the Weber River to allow for additional riparian zone and much needed riverbank enhancements. Proposed Timeline Closed Session August 8, 2017 Board Consideration of REPC/First Amend August 22, 2017 Closing Date August 24, 2017 Risk If the Agency were to purchase the property subject to the terms of the attached REPC and First Amendment, the Agency will be responsible for the cleanup, demolition and disposition or redevelopment of the property. The potential delay or cost overrun of any of these tasks presents a risk that could have an additional fiscal impact beyond the acquisition costs described herein. Fiscal Impact Purchase Price: $400,000 Closing Costs: ~$5,450 Commissions: $12,000 ---PAGE BREAK--- Total Acquisition: $417,450 Barrel Removal: ~$1,300,000 Asbestos: ~250,000 Demolition: ~$500,000 Dirt Cleanup: ~150,000 Total Acquisition: $2,200,000 Funds to be sourced from FY18 General Fund ($165,000 Unappropriated Fund Balance) and FY18 CIP – CD081 ($2,035,000) Recommendation Due to the significant beneficial impact that would come from controlling the future development options and potential of the subject property, the Administration recommends the Board approve the resolution for the purchase of the property located at 390 W Exchange Road. For further information, please contact Brandon Cooper at (801) 629-8947. ---PAGE BREAK--- 2017-6 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK---