Title
Disposition of City-Owned Former First National Bank of Arizona Building Located at 1 S. 24th St. (Ordinance S-48200)
Description
Request to authorize the City Manager, or his designee, to enter into agreements with One South 24th Street Development Group, LLC, or its City-approved designee (Developer), for the sale and redevelopment of City-owned property located at 1 S. 24th St. Further request to authorize the City Treasurer to accept all funds related to this item. The sale of the property will result in a one-time cash payment of $240,000, which will be deposited into the City's Aviation Department Fund.
Report
Summary
The City of Phoenix Aviation Department owns Maricopa County Assessor Parcel Number (APN) 121-62-041A, located at 1 S. 24th St. (Site). The Site is approximately 1.55 acres and includes the vacant former First National Bank of Arizona Building (Building). The Building, comprised of approximately 5,460 square feet, was originally designed by Kenneth Oberg, built in 1966, and is eligible for historic designation.
On June 20, 2018, City Council authorized the Community and Economic Development Department (CEDD) to issue a Request for Proposals (RFP) for the sale and adaptive reuse of the Site, and on Sept. 17, 2018, RFP-CED18-FNB was issued.
On Dec. 16, 2018, a fire incident occurred in the Building, resulting in a loss of life and damage to the Building’s interior and roof. This incident occurred before the RFP process was completed. Key dates and actions that followed, include:
January 2019: RFP-CED18-FNB canceled with intent to reissue;
June 2019: Fire Damage Investigation and Final Report completed; and
May 2020: Building Conditions Assessment and Report completed.
The City received an insurance recovery for the loss and will sell the Site as-is. On Oct. 30, 2020, RFP-CED18-FNB was canceled with no intent to reissue due to changes in the Site’s condition. Staff recommended conducting direct negotiations for the sale of the Site. On Feb. 17, 2021, City Council authorized CEDD to conduct direct negotiations for the disposition of the Site and stipulated the placement of a 30-year declaration of restrictive covenants on the Site prior to any sale and/or required the sale be conditioned on a 30-year conservation easement.
On April 30, 2021, CEDD received four offers to purchase and redevelop the Site. Of the four offers received, the Developer's activation concept for the Site presented the best value to the City. CEDD staff has completed negotiations with the Developer based on the proposed project submitted, and recommends moving forward.
Proposed business terms include:
Developer will purchase the Site as-is for $240,000 paid in cash.
Developer will also provide no-cost contractual services to the benefit of the Aviation Department in an amount not less than $240,000 over a five-year period.
Prior to close of escrow, Developer will enter into a Disposition and Redevelopment Agreement with the City.
Prior to transfer of ownership from the City to the Developer, the City will record a 30-year Declaration of Restrictive Covenants on the Site.
Prior to close of escrow, Developer will agree to and sign an avigation easement with the City.
Financial Impact
The disposition of the Site will result in a one-time sales cash payment of $240,000 that will be deposited into the City's Aviation Department Fund. There is no impact to the General Fund.
Concurrence/Previous Council Action
The Economic Development and Equity Subcommittee recommended approval of this item on Nov. 16, 2021, by a vote of 4-0.
Public Outreach
Staff presented proposed business terms and scope of possible development to the Eastlake Park Neighborhood Association on Sept. 20, 2021, the 24 Sky Harbor Business Alliance on Sept. 28, 2021, the City's Central City Village Planning Committee on Oct. 11, 2021 and to the City's Historic Preservation Commission on Oct. 18, 2021.
Location
1 S. 24th St.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Managers Ginger Spencer and Mario Paniagua, and the Community and Economic Development and Aviation departments.