Title
Authorization to Enter into Purchase and Sale Agreements with the Isaac School District and Phoenix Community Enhancement, LLC. (Ordinance S-50009)
Description
Request authorization for the City Manager, or his designee, to allow the City to enter into purchase and sale agreements (Agreements) with the Isaac School District (District) and Phoenix Community Enhancement, LLC (PCE) for the acquisition and immediate resale of approximately 3.4 acres of certain real property located at 3101 W. McDowell Road. This transaction will help facilitate the development of the Bret Tarver Terrace Affordable Housing Project that will be operated pursuant to the terms of a long-term ground lease between PCE and UMOM Housing 9, LLC (UMOM). Additionally request authorization for the City Manager, or his designee, to enter into any additional agreements necessary to close this transaction. Further request authorization for the City Treasurer to accept, and City Controller to disburse, any funds under the term of the Agreements.
Report
Summary
The City received a request from the Superintendent of the District to participate in the sale of approximately 3.4 acres of surplus real estate (Property). Under Arizona law, the District may only sell or lease school property to the State of Arizona, a county, a city, another school district or a tribal government agency required for a public purpose if the sale or lease of the property will not affect the normal operations of a school within the District. The Property is to be developed to support the Bret Tarver Terrace Affordable Housing Project (Project), which will create 96 affordable housing units of which 87 units will serve households at 60 percent Area Median Income (AMI) and 9 units will serve households at 50 percent AMI. Under the terms of the Agreements, the District shall sell the Property to the City, and upon taking title, the City shall record a Land Use Restriction Agreement (LURA) with the Maricopa County Recorder requiring the use of the Property be restricted to further the public purpose of increasing the supply of affordable housing. The LURA will require affordability for a minimum period of 40 years. Thereafter, the City shall immediately convey the Property to PCE, a special purpose nonprofit and wholly controlled affiliate of the Phoenix Industrial Development Authority (IDA). As required under the terms of the Agreements, PCE shall enter into a long-term ground lease with UMOM to develop the Project. The purchase price for the Property will be the lump sum rental payment under the long-term ground lease paid by UMOM to PCE. The District’s Governing Board authorized the sale of the Property under the structure contemplated herein on June 8, 2023.
Financial Impact
There will be no financial impact to the City. The purchase price paid to the District for the Property shall be the lump sum rental payment under the long-term ground lease paid by UMOM to PCE. In addition, under the terms of the Agreements, PCE shall pay any and all associated costs incurred by the City in connection with these transactions including, but not limited to, any title, insurance and closing costs.
Location
3101 W. McDowell Road
Council District: 4
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing Department.