Title
Reconsideration of Item 136 from the June 6, 2018 Formal Council Meeting - (CONTINUED FROM MAY 16, 2018) - Voluntary Property Acquisition - 3121 E. Washington St. (Ordinance S-44616)
Description
Request to authorize the City Manager, or his designee, to perform all acts necessary to acquire fee title to and possession of real property comprised of approximately 3.2 acres located at 3121 E. Washington St., together with associated improvements, appurtenances, and other property rights (Property). The acquisition will be by voluntary purchase from AP Building Holdings, LLC at a price not to exceed the Property's appraised value of $3,620,000.
Further request authorization for the City Manager, or his designee, to enter into a temporary occupancy agreement to allow the current occupant enough time to vacate the Property as may be necessary to and in furtherance of the acquisition. The acquisition agreement may contain other terms and conditions deemed necessary or appropriate by the City Manager or his designee. Further request authorization for the City Controller to disburse all funds necessary to purchase the Property in an amount not to exceed $3,620,000, plus usual and customary closing costs. Further request authorization for the City Treasurer to accept all funds related to this item.
Report
Summary
AP Building Holdings, LLC initiated the voluntary acquisition process in August 2017. The Property consists of approximately 3.2 acres of land and two buildings with a combined area of approximately 44,102 square feet and other improvements. The Property is currently occupied by Arctic Paws, the tenant, a manufacturer of dog treats. Arctic Paws's business has outgrown the Property and the tenant needs to move to a larger site. In January 2018, an independent appraiser determined the market value of the Property was $3,620,000. The City has completed a Phase I and Phase II environmental site assessment and other testing on the Property which shows the Property does not require environmental remediation. The appraiser concluded there are no adverse effects on the market value of the Property.
The Property is near Phoenix Sky Harbor International Airport and is a strategic voluntary acquisition important to the Airport’s future growth. After the Property is purchased, the Aviation Department will determine its highest and best use in order to generate the maximum rental income.
Financial Impact
The purchase price of the Property is $3,620,000, plus usual and customary closing costs. Funds are available in the Aviation Department's Capital Improvement Program.
Concurrence/Previous Council Action
This item was approved by the Downtown, Aviation, Economy and Innovation Subcommittee on May 2, 2018 by a vote of 4-0.
Location
3121 E. Washington St.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation and Finance departments.