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HomeMy WebLinkAbout17-021 Affordable Housing Cherry Street Properties; Declaring Property to be SurplusResolution 17-021 Page 1 of 3 RESOLUTION NO. 17-021 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND, WASHINGTON, RELATED TO AFFORDABLE HOUSING AT THE CITY'S CHERRY STREET PROPERTIES; DECLARING PROPERTY TO BE SURPLUS TO THE CITY'S NEEDS AND AUTHORIZING THE CITY MANAGER TO DISPOSE OF THE PROPERTY WHEREAS, the City of Port Townsend ("City") owns vacant property located in the 100 block of Cherry Street (Portions of Tax Parcels 001024075 and 001023005); and, WHEREAS, the City Council, in Resolution 09-035, designated this property as being suitable for affordable housing purposes under Chapter 3.44 of the Port Townsend Municipal Code ("PTMC"). This Resolution was modified by Resolution 10-024, which added two properties to the inventory and imposed a requirement that units constructed on all properties so designated remain affordable for at least 40 years; and, WHEREAS, Resolution 11-018 directed the City Manager to "work with owners and possibly providers to reconfigure Cherry Street to establish buildable lots for affordable housing, subject to final Council approval on agreements and configuration"; and, WHEREAS, Homeward Bound dba Olympic Housing Trust ("the Trust") is in negotiations with a property owner in Canada to acquire a four-plex building that could be placed on the Cherry Street property. They have a contract with Nickel Brothers, Housing Moving USA, Inc. and Nickel Brothers House Moving, Ltd., for the purchase, move, and delivery of this building to Port Townsend in mid-May 2017; and, WHEREAS, the Trust is currently seeking institutional and private funding for this project, but has not secured all its financing; and, WHEREAS, PTMC 3.44.030, 3.44.040, and 3.44.050 set forth the process for declaring property designated as suitable for affordable housing purposes as surplus and, if declared surplus, for disposition of that property; and, WHEREAS, at a Special Meeting held on April 24, 2017, the Council adopted Resolution 17-019, which authorized the City Manager to allow preliminary site work on the property and to execute loan agreements with the Trust; and, WHEREAS, as required by PTMC 3.44.040, the City issued a notice of a public hearing on the proposal to surplus the property, which hearing was conducted on May 8, 2017. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port Townsend as follows: Section 1. Having conducted a public hearing as required by PTMC 3.44.040, the Council adopts the following findings and conclusions based on the non-exclusive criteria in PTMC 3.44.030. Resolution 17-021 Page 2 of 3 Findings: 1. The property is identified in the City's Non -Motorized Transportation Plan as having a pedestrian shortcut along the west boundary. Because that part of the property is covered in vegetation, no existing path exists there. Utilities on the property are noted as part of the inventory in the Water Systems Plan and the Wastewater Comprehensive Plan, but the property has not otherwise been identified in any other comprehensive or functional plan. (Criteria 3.44.030A(3)(a)). 2. The City Manager and City department heads have reviewed the property and state that, subject to retaining easements for access and utilities, the property is not needed for transportation, utility, stormwater, habitat, open space and recreation, or other city purpose. (Criteria 3.44.030A(3)(b)). 3. The only restraint on the property is that Resolution 05-039 states that net proceeds from the sale of the property are designated for the golf course capital improvement program,. (Criteria 3.44.030A(3)(c)). 4. Because the recommended action is to convey this property to a non-profit housing trust, staff has not done an analysis regarding whether future value of the property is greater than would be reasonably expected through fund returns (Criteria 3.44.030A(3)(d)) or whether return on investment would be greater through management of the property as opposed to disposing of it as proposed (Criteria 3.44.030A(3)(e)). Because the property will be transferred to a non-profit housing agency, there is no anticipated tax impact (3.44.030A(3)(f)). 5. Council has previously designated this property as being suitable for affordable housing purposes (Resolution 09-035) and has previously directed the City Manager to work with owners and providers to configure the property for affordable housing. (Criteria 3.44.030A(4)). 6. The City published notice of the public hearing on April 26, 2017, which complies with the notice requirements of PTMC 3.44.040B and C. 7. Based on information from the Jefferson County Assessor, the estimated fair market value of the property is between $500,000 and $600,000. 8. The City Manager recommends that Council declare this property as surplus. Additionally, the City Manager requests authorization to sell this property to Homeward Bound dba Olympic Housing Trust for $1 in order to support the City's Comprehensive Plan and meet the purpose and intent of the affordable housing provisions of Chapter 3.44 PTMC. Conclusions: 1. PTMC 3.44.030A(3) states that the criteria are non-exclusive. Therefore, Council concludes that it can weigh certain criteria more favorably than others, and that the proposal does not have to meet all the criteria for Council to approve it. 2. Based on Finding 1, Council concludes that the absence of a current path through the property means that the "shortcut" identified in the Non -Motorized Plan is not critical to the Resolution 17-021 Page 3 of 3 City's trail system. 3. Based on Finding 2, Council concludes that, provided deed restrictions remain in place for existing and reasonably -anticipated access and utilities, the property is not needed for any City purpose. 4. Based on Findings 3, 4, and 5, Council concludes that the financial implication of surplus of the property and disposing of it to a non-profit housing trust would have little or no impact on the City's anticipated budget. The property does not produce income now, and the possible benefit of a market -rate sale to the golf course is overridden by the overall benefit to the City of providing a location for affordable housing. 5. Based on all the adopted Findings, Council concludes that there is no potential future use or other compelling reason to retain this property. 6. PTMC 3.44.040E allows the Council to approve a sale without an appraisal if it determines that the value received will be of equal or greater value. That value may include "intangible values," including goals and policies of the City's functional and subarea plans, and provisions for other public health, safety, and welfare benefits to the City. Council concludes that the intangible value of supporting the City's affordable housing goals justifies accepting the Assessor's estimate without requiring a full appraisal and further justifies disposing of this property for less than the full market value. Section 2. Based on the Findings and Conclusions set out in this Resolution, the City Council declares that the City -owned property located in the 100 block of Cherry Street (Portions of Tax Parcels 001024075 and 001023005) is surplus to the City's needs. Section 3. As provided for in PTMC 3.44.050B, the City Manager is authorized and directed to dispose of the property by sale for a nominal amount. The disposal shall retain easements for public utilities over the property. Additionally, any conveyances will require that the property be rented to persons that meet the criteria as very low-income or low-income households. The City Manager is further authorized to sign all documents or take any other administrative actions consistent with this Resolution. Council ratifies and confirms the Purchase and Sale Agreement signed by the City Manager and Homeward Bound on May 4, 2017. ADOPTED by the City Council of the City of Port Townsend at a special meeting thereof, held this 8th day of May 2017. Deborah S r meson.:. +✓ Mayor Attest: Joanna Sanders, CMC City Clerk Approved as to form: Steven L. Gross City Attorney