REDEVELOPMENT AGENCY STAFF MEMO DATE:...

REDEVELOPMENT AGENCY STAFF MEMO

DATE: September 13, 2016 ITEM #:

PREPARED BY: Tammy Hunsaker, David Arteaga, and Edward Butterfield

RE: Discussion and formation of a real property disposition policy

REQUESTED ACTION:

1. Approve the real property disposition policy.

2. Approve the real property disposition policy with modifications.

3. Do not approve the real property disposition policy.

4. Defer action to a future meeting.

POLICY ITEM: Real property disposition.

BUDGET IMPACTS: Future impacts to the sales price of Agency-owned property.

EXECUTIVE SUMMARY: The Board of Directors (“Board”) has identified and prioritized a

series of policies to be revised as part of recent changes to the Redevelopment Agency of Salt Lake

City’s (“RDA”) bylaws, with the real property disposition policy ranked as a high priority. Staff

presented an initial draft of the Real Property Disposition policy to the Board during the July 2016

meeting. In its discussion, the Board requested that staff provide additional information on the

need for a property categorization system that classifies each RDA-owned property as either Tier 1

or Tier 2 and determines the appropriate process for reporting to the Board. This memorandum

provides a follow-up to that discussion.

Staff analyzed the property categorization system that was presented at the July 2016 meeting and

recommends retaining the system as previously presented for the following reasons:

1. The property categorization system will allow the RDA to be more nimble in the

disposition of Tier 1 properties.

2. The property categorization system will provide consistency with the equivalent policy for

disposition of city-owned land.

3. Upon consultation with the City Attorney’s Office, it was concluded that the property

categorization system will assist in preserving separation of powers.

REDEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION: Staff presented

the draft real property disposition policy to the Redevelopment Advisory Committee (RAC) on

July 6, 2016. RAC members provided staff with feedback, a summary of which was provided to

the Board during the July 2016 meeting.

ANALYSIS & ISSUES: During the July 2016 meeting, the Board requested that Staff evaluate

the need for a property categorization or “Tier” system as part of the Real Property Disposition

policy. An overview and analysis is as follows:

Property Categorization and Reporting Overview

As per the attached draft Real Property Disposition Resolution, each RDA-owned property shall

be categorized into one of two categories, Tier 1 and Tier 2. Category determination is proposed

as follows:

1. Tier 1

Real properties that are Agency-owned and meet at least one of the following definitions:

a. Property is specifically identified in an adopted Salt Lake City master plan.

b. Property is a parcel or parcel assemblage that totals two (2) or more contiguous

acres in size.

c. Property is listed on the local or national register of historic places as historically

significant.

d. Property is fronting or adjacent to city-owned property, other than a public street,

of at least 0.5 acres in size.

2. Tier 2

Real properties that are Agency-owned and are not otherwise included in Tier 1.

Approximately 50% of RDA-owned properties would qualify as Tier 1, with the remaining 50%

qualifying as Tier 2. Categories shall determine the appropriate process for reporting. Reporting

procedures are proposed as follows:

1. Staff will provide to the Board, not less than semi-annually per fiscal year, an inventory

of all Tier 1 and Tier 2 properties. Such report shall include an address and description of

each property, including the approximate size, zoning, description of significant

structures or improvements on the site, and disposition status. The report will also

include any interim uses occurring on the property, and the Agency’s proposed timeframe

for potentially disposing of the property.

2. Additional reporting requirements for Tier 1 properties are as follows:

a. Pre-Disposition

Prior to marketing of the property, staff will provide an update to the Board as to

the property’s reuse plan, method of disposition, timeline of disposition, and other

information relevant to the disposition of the property.

b. Developer Selection

Staff will provide an update to the Board when the Agency has selected a

purchaser with which to negotiate.

c. Development Agreement

Staff will provide an update to the Board when the Agency has entered into a real

estate purchase agreement with the selected purchaser.

Analysis

Upon analysis of the property classification system internally and with the City Attorney’s Office,

staff recommends retaining the system as previously presented for the following reasons:

1. Nimble Disposition Process:

The property categorization system will allow the RDA to move more nimbly during the

disposition of properties categorized as Tier 2, while recognizing that properties of more

significance, Tier 1 properties, shall be subject to an enhanced public process.

2. Consistency with City Policy:

The property categorization system will provide consistency with the equivalent city

policy. City Code 2.58: City Owned Real Property provides that properties shall be deemed

“Significant” if the property meets certain criteria. Since the RDA owns different types of

properties with different objectives for disposition, it is not realistic to have the same

criteria to deem an RDA-owned property as “Tier 1” as it is to deem a city-owned parcel as

“Significant.” However, the property classification system provides consistency in the

concept of identifying and treating certain properties with a higher level of importance.

3. Separation of Powers:

Under Utah law, the legislative body has the authority to create general rules that the

administration must follow when it disposes of real property. The administrative body has

the authority to manage real property, including through disposition and acquisition. The

removal of the Tier 1/Tier 2 distinction would give the Board the authority, in an open

meeting, to consider the disposition of every piece of RDA-owned property in three

separate occasions: (1) pre-disposition; (2) developer selection; (3) development

agreement. This could potentially obscure the distinction between administrative and

legislative authority. In addition, it could prolong the disposition process.

Since no changes were made to the property categorization system, the Real Property Disposition

Policy draft (attached) has been updated only with minor text edits. If adopted, the Real Property

Disposition Policy will replace the previous policy that was adopted by the Board in 2000.

PREVIOUS BOARD ACTION:

May 2016: Based on proposed revisions to the Board’s bylaws, the City Attorney’s

Office provided a recommendation to the Board to adopt a new property disposition

policy that conforms with separation of powers principles.

June 2016: The Board identified and prioritized a series of policies to be revised as part

of recent changes to the Agency’s bylaws, with the real property disposition policy

ranked as a high priority.

July 2016: Staff presented an initial draft Real Property Disposition policy to the Board.

ATTACHMENTS:

1. Real Property Disposition Policy Resolution

2. Real Property Disposition Categorization Chart

3. RDA Property Inventory

RESOLUTION NO. _______: Real Property Disposition Policy______, 2016

RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT

AGENCY OF SALT LAKE CITY ADOPTING A REAL PROPERTY DISPOSITION

POLICY

WHEREAS, the Board of Directors of the Redevelopment Agency of Salt Lake City (the

“Board”) desires to formalize policies with respect to the Redevelopment Agency of Salt

Lake City’s (“RDA”) real property disposition, and

WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to

transact the business and exercise the powers provided for in the Utah Community

Reinvestment Agency Act; and

WHEREAS, the Utah Community Reinvestment Agency Act grants the RDA powers to

sell, convey, grant, gift, or otherwise dispose of any interest in real property; and provide for

project area development, and

WHEREAS, the RDA utilizes real property disposition to implement project area plans,

strategic plans, and Salt Lake City master plans.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF

THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, AS FOLLOWS:

1. Administration and Approval Process. Unless otherwise designated herein,

the administration and approval process for the disposition of RDA-owned real

property shall be conducted in the following manner:

a. The Board shall be provided reports on the status of all RDA-owned real

properties, including properties actively being disposed of, as according to

the Reporting procedures outlined herewith.

b. As determined by the RDA Executive Director, RDA-owned properties

may be identified as candidates for disposition and authorized to be

disposed of according to the Methods of Disposition contained herewith.

c. If a satisfactory offer is received on an RDA-owned property, and the

disposition terms and conditions are approved by the RDA Executive

Director, RDA staff shall dispose of the real property pursuant to the RDA’s

administrative procedures, unless disposition terms are required to be

forwarded to the Board for consideration and approval of the sales price

according to the Sales Price Protocol outlined herewith.

d. If the disposition requires the approval of the Board, upon approval of the

sales price by a majority vote of the Board real property disposition shall be

arranged pursuant to the RDA’s administrative procedures.

e. The RDA Executive Director may enter into exclusive negotiation, option

to purchase, and development agreements.

2. Real Property Disposition Scope. The policy applies to all real property owned

by the RDA.

3. Real Property Categorization. All real property owned by the RDA shall be

categorized as either Tier 1 or Tier 2.

a. Tier 1 properties shall be real properties that are RDA-owned and meet at

least one of the following categories:

i. Property is specifically identified in a Salt Lake City adopted master

plan.

ii. Property is a parcel or parcel assemblage that totals two (2) or more

contiguous acres in size.

iii. Property is listed on the local or national register of historic places

as historically significant.

iv. Property is fronting or adjacent to city-owned property, other than a

public street, of at least 0.5 acres in size.

b. Tier 2 properties shall be those that are RDA-owned and are not otherwise

included in Tier 1.

4. Reporting. Unless otherwise specified herein, RDA staff shall provide the

Board with reports regarding the disposition and status of RDA-owned properties

as follows:

a. The RDA shall provide a written briefing to the Board, no less than semi-

annually per fiscal year, which contains an inventory of all Tier 1 and Tier 2

properties. Such briefing shall also include an address and description of

each property, including the approximate size and zoning; description of

significant structures or improvements on the site; description of any

interim uses occurring on the site; disposition status; and timeframe for

potentially disposing of the property.

b. Updates regarding the disposition process for Tier 1 properties shall be

provided at one of the Agency’s public meetings at the following stages of

the disposition process:

i. Pre-Disposition

Prior to marketing of the property, RDA staff shall provide an

update to the Board as to the property’s reuse plan, method of

disposition, timeline of disposition, and other information relevant

to the disposition of the property.

ii. Developer Selection

RDA staff shall provide an update to the Board when a purchaser

has been selected with which to negotiate terms of the sale.

iii. Development Agreement

RDA staff shall provide an update to the Board when the RDA has

entered into a real estate purchase agreement with the selected

purchaser.

5. Methods of Disposition. Disposition of all RDA-owned real property shall

abide by all applicable laws and be conducted in a competitive and transparent

manner as deemed appropriate and effective. Further, disposition methods shall

support the RDA and Salt Lake City objectives as outlined in master plans, project

area plans, and other adopted policies. Disposition of property shall be consistent

with the RDA’s Housing Policy to determine if the inclusion of affordable housing

is required. All RDA-owned properties shall be subject to a development

agreement or other mechanism to ensure compliance with the intended reuse plan

for the property. Unless otherwise specified herein, RDA-owned properties shall be

disposed of through the use of the following methods:

a. Competitively Marketed

The RDA shall competitively market properties to create open and transparent

exposure to the marketplace. Methods to competitively market properties are

available for any RDA-owned property and include the following:

i. Request for qualifications (RFQ): to competitively market the

property through a time-limited qualifications-based selection

process.

ii. Request for proposals (RFP): to competitively market the property

through a time-limited project-based selection process.

iii. Market property on an open-ended basis: to competitively market

the property through a listing with a property broker or other

marketing channels.

b. Exclusively Negotiated

An exclusively negotiated sale may be deemed appropriate and effective only if

at least one of the following criteria is met:

i. The property is landlocked.

ii. Sale to an adjacent property owner to facilitate redevelopment

objectives as defined in a project area strategic plan.

iii. Sale to a non-profit or governmental agency for a community

development or public use.

iv. Sale of property that has been competitively offered with no

competitive responses received.

v. Sale of property that has previously been used as a public right of

way that is no longer required for such purpose.

vi. Exchange of property to facilitate redevelopment objectives as

defined in a project area strategic plan.

6. Sales Price Protocol. Unless otherwise specified herein, RDA shall dispose of

real property under the most advantageous terms that are appropriate for the

circumstances, and shall abide to the methodology outlined herein as follows:

a. The sales price of the property shall be fair market value as determined by an

RDA-commissioned appraisal. The appraised value may also take into account

economic impacts of RDA-imposed development requirements. No Board

approval shall be required for a sale at appraised fair market value.

b. Property may be discounted below fair market value to support the

implementation of project area strategic plans.

i. Property discounts shall be determined by a financial analysis of the

project, including a gap analysis that demonstrates the property

discount is necessary for the project to succeed. Market conditions,

economic trends, and public benefits relating to affordable housing

and economic development shall be considered when determining

property discounts.

ii. Property discounts are subject to approval by a majority vote of the

Board if property is to be sold at a discount greater than 10% from

appraised fair market value.

Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this

____ day of ___, 2016

Lisa R. Adams, Chairperson

Transmitted to the Executive Director on .

The Executive Director:

does not request reconsideration

requests reconsideration at the next regular Agency meeting.

Jacqueline M. Biskupski, Executive Director

Approved as to form:

Salt Lake City Attorney’s Office

Katherine N. Lewis

Project Area/Property Address Master Plan Acreage (Size) Historic Adjacency Tier 1 Tier 2

Central Business District

Utah Paperbox 340 West 200 South X ¤Utah Theater & Retail 144 South - 156 South Main Street X ¤Gallivan Center (Block 57) Avenue 239 South Main Street & 228 South State

Street X ¤Broadway Center (parking garage) 135 East 300 South ∞Block 79 (land - Vivint Arena) 365 West South Temple, 301 West South

Temple X X ¤Metro Condos Parking 350 South 200 East ∞Block 70 Midblock Walkway 147 South Main Street X ¤Regent Street 167-169 Regent Street X ¤Depot District

Station Center - Parcel 1 580 West 300 South X X ¤Station Center- Parcel 2 535 West 300 South X ¤Station Center Parcel 3 500 West 400 South X X ¤Station Center - Parcel 3-A 519-533 West 300 South X ¤Station Center: Rights of Way (State

of Utah, Nicholas & Co, SLC Corp)

551 West 300 South

∞HOWA Gardens 600-700 West-100 South ∞600 West Small Properties 600 West 100 South ∞Sun Bar 702 West 200 South ∞Rio Grande Hotel 428 West 300 South ∞Granary District

Gale Street 901 South Gale St. X ¤

REAL PROPERTY DISPOSITION CATEGORIZATION CHART

CATEGORIZATION CRITERIA ASSIGNED TIER

Project Area/Property Address Master Plan Acreage (Size) Historic Adjacency Tier 1 Tier 2

REAL PROPERTY DISPOSITION CATEGORIZATION CHART

CATEGORIZATION CRITERIA ASSIGNED TIER

Sugarhouse

Former Deseret Industries site 2234 South Highland Dr. X ¤Monument Plaza Paseo 1070 East 2100 South X ¤Streetcar Traction Power Substation

Site

2216 South McClelland X ¤S-Line Greenway 2215 South 900 East X ¤West Capitol Hill

Marmalade Parcel 2 & 3 550 North 300 West X X ¤Marmalade Parcel 4 500 North 260 West X X ¤Artic Court 524 North Artic Court X X ¤West Temple Gateway

Jefferson Walkway 830 South Jefferson ∞916 South Jefferson Street 916 Jefferson Street ∞Green Warehouse 863 South 200 West ∞EZ Auto 208 West 900 South ∞Jefferson Lot 156 West 900 South ∞West Montrose 745 South 300 West ∞

RDA-Owned Properties

1

1) Utah Paper Box

2) Utah Theater

3) Gallivan Center / Avenue

4) Broadway Center

Parking Garage

5) Block 79 (Vivint Arena)

6) Metro Condos Parking

7) Block 70 Mid-block

Walkway

8) Regent Street Properties

Central Business District

2

1 2

3

4

5

6

78

Utah Paperbox

340 West 200 South

CBD Property #1

3

Acreage: 2.01

Zoning: D-4

Current status: Negotiating

option to purchase

agreement with developer,

with an emphasis on the

affordable housing

component of project;

Exclusive negotiation period

ends July17, 2016.

Utah Theater

144 South Main Street

CBD Property #2

4

Acreage: 0.89

Zoning: D-1

Current status: Identifying

appropriate redevelopment

strategy; conducting

redevelopment study with

Jones Lang LaSalle.

Gallivan Center &

Gallivan Avenue

50 East 200 South

CBD Property #3

5

Acreage: 7.92

Zoning: D-1

Current status: Plaza

managed by Public

Services; parking garage

leased to Boyer; retail

spaces leased to

commercial tenants.

Broadway Center

Parking Garage

135 East 300 South

CBD Property #4

6

Acreage: 0.66

Zoning: D-1

Current status: Leased to

Broadway Center Ltd.

Block 79 (Vivint Arena)

135 East 300 South

CBD Property #5

7

Acreage: 9.9

Zoning: D-4

Current status: Land lease

with Larry H. Miller Arena

Corporation through June 8,

2040.

Metro Condos Parking

350 South 200 East

CBD Property #6

8

Acreage: N/A

Zoning: N/A

Current status: The RDA

owns 250 parking stalls in

the Metro Condos parking

garage and leases them to

the State of Utah.

Block 70 Midblock

Walkway

CBD Property #7

9

Acreage: N/A

Zoning: N/A

Current status: Under

construction; the property

will be used as a public

midblock walkway

connecting Regent Street

and Main Street.

Regent Street

Properties

167-169 South

Regent St.

CBD Property #8

10

Acreage: 0.13

Zoning: D-1

Current status: Executed

option agreement with

neighboring property owner.

1) Station Center: Parcel 1

2) Station Center: Parcel 2

3) Station Center: ROW

Property Exchange

a) State of Utah

b) Nicholas & Co.

c) Salt Lake City

4) Station Center Parcel 3

5) Howa Properties

6) 600 West Small

Properties

7) Sunbar Property

8) Rio Grand Hotel

Depot District Properties

11

2

3

1

4

5

6

7

8

Station Center Parcel 1

580 West 300 South

Depot Property #1

12

Acreage: 2 acres

Zoning: D-3

Current status:

• Term Sheet approved by

RDA Board.

• Option to Purchase

contract under review.

Station Center Parcel 2

535 West 300 South

Depot Property #2

13

Acreage: 0.16 acres

15,000 sf building

Zoning: D-3

Current status:

• Option to Purchase

executed between RDA and

Station Center Village, LLC.

300 South Property

Exchange: State of Utah

519-533 West 300 South

Depot Property #3a

14

Acreage: ~0.25 acres

Zoning: D-3

Current status:

• Negotiating property trade

with State of Utah to

establish Woodbine

Avenue connection.

300 South Property

Exchange: Nicholas & Co.

551 West 300 South

Depot Property #3b

15

Acreage: ~0.2 acres

Zoning: D-3

Current status:



establish Market Street

connection.

300 South Property

Exchange: City ROW300 South/500 West-600 West

Depot Property #3c

16

Acreage: ~0.2 acres

Zoning: D-3

Current status:



establish Market Street

connection.

Station Center Parcel 3500 West/400 South

Depot Property #4

17

Acreage: ~2.5 acres

Zoning: D-3

Current status:

• Negotiating potential

property acquisition to

market with existing

parcels

• Expected RFP release in

summer/fall 2016

Howa Properties600-700 West-100 South

Depot Property #5

18

Acreage: ~3.5 acres

Zoning: GMU

Current status:

• Office building/Warehouse

currently leased

• Staff working on 100 South

small area plan

• Garden property interim

use

600 West Small PropertiesSouth Temple-100 South/600

West

Depot Property #6

19

Acreage: 0.43 acres

Zoning: GMU

Current status:

• No current plans for the

property.

Street view of property

Sun Bar Property702 West 200 South

Depot Property #7

20

Acreage: 0.31 acres

Zoning: GMU

Current status:

• No current plans for the

property.

HomeInn (Rio Grande Hotel)428 West 300 South

Depot Property #8

21

Acreage: 0.30 acres/

Zoning: GMU

Current status:

• RDA is leasing a 49-room

SRO to HomeInn to

provide transitional

housing.

1) Gale Street

Granary District Properties

22

1

Gale Street

901 South Gale Street

Granary Property #1

23

Acreage: 0.26 acres

Zoning: D-2

Current status: Market

property Fall 2016

1) Former D.I. Site

2) Monument Plaza Paseo

3) Streetcar Traction Power Substation Site

4) S-Line Greenway

Sugar House Property

24

1

2

34

Former D.I. Site

2234 S. Highland Dr.

Sugar House Property #1

25

Acreage: .72 acres

Zoning: CSHBD1

Current status: Anticipate

marketing property in the fall

of 2016.


Monument Plaza Paseo

1070 E. 2100 S.


26

Acreage: .08 acres

Zoning: CSHBD1

Current status: Hardscape

and landscape

improvements are complete

as part of Monument Plaza

renovation. The Property is

used as public open space.


Steetcar Traction

Power Substation Site

2216 S. McClelland St.


27

Acreage: .06 acres

Zoning: Government

Building/Land

Current status: The

property is used for the S-

Line streetcar traction power

substation.


S-Line Greenway

2215 S. 900 E.


28

Acreage: .04 acres

Zoning: Government

Building/Land

Current status: The

property is used for the

Parely’s Trail as part of the

S-Line Greenway.


1) Marmalade Parcel 4

2) Marmalade Parcels 2&3

3) Arctic Court Properties

West Capitol Hill Properties

29

1

2

3

Marmalade Parcel 4

260 West 500 North

West Capitol Hill Property #1

30

Acreage: .86 acres

Zoning: R-MU

Current status: Everest

Builders, the selected

developer, is expected to

break ground in July 2016

on 12 townhomes.

Marmalade Parcels 2&3

550 North 300 West


31

Acreage: 1.96 acres

Zoning: R-MU

Current status: ClearWater

Homes, the selected

developer, is expected to

break ground in October

2016 on a mixed-use

project.

Arctic Court Properties

524 North Arctic Court


32

Acreage: .22 acres

Zoning: Single Family

Residence

Current status: Begin

renovation of historic home

in July 2016 and

construction of an adjacent

infill home in October 2016.

1) Jefferson Walkway

2) 916 S. Jefferson Street

3) 863 S. 200 W.

4) 208 W. 900 S.

5) 156 W. 900 S.

6) West Montrose

West Temple Gateway Properties

33

1

2

4 3 5

6

Jefferson Walkway

830 South Jefferson St.

West Temple Gateway Property #1

34

Acreage: 0.5

Zoning: FBUN-1, FBUN-2

Current status: Developer

working through permitting

process; closing on sale of

property in late July

916 S. Jefferson Street


35

Acreage: 0.24

Zoning: FBUN-2

Current status: Under

contract with Central Ninth

Development Partners who

will build four townhomes on

the property. Outside closing

date is September 15, 2016.

863 South 200 West


36

Acreage: 0.5

Zoning: FBUN-2

Current status: Preparing

purchase agreement with

LandForge, Inc. who will

build mixed-use project on

the property, including 23

condos and 4,000 sq. ft. of

commercial.

208 West 900 South


37

Acreage: 0.4

Zoning: FBUN-2

Current status: Negotiating

option to purchase

agreement with SpyHop;

ENA period ends December

14, 2016.

156 West 900 South


38

Acreage: 0.2

Zoning: FBUN-2

Current status: Market

property Fall of 2016.

West Montrose

745 South 300 West


39

Acreage: 1.9

Zoning: FBUN-2

Current status: Conducting

environmental due diligence;

anticipate marketing the

property in the Fall of 2016.

REDEVELOPMENT AGENCY STAFF MEMO DATE:...

Documents

Transcript of REDEVELOPMENT AGENCY STAFF MEMO DATE:...