City of Alexandria, Virginia
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MEMORANDUM
DATE: JANUARY 16, 2013
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: RASHAD M. YOUNG, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of a Contingent Contract to Sell City Property at 200 North Royal Street.
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ISSUE: Consideration of a contract to sell City-owned real estate at 200 North Royal Street contingent upon approval of the sale under Section 9.06 of the City Charter.
RECOMMENDATION: That City Council authorize the City Manager to enter into a contract with TTR Sotheby's International Realty to sell 200 North Royal Street for $1,350,000. The contract will be contingent upon approval of the sale per Section 9.06 of the City Charter, which includes approval by the Planning Commission and City Council.
BACKGROUND: 200 North Royal Street (Elder Crafters also known as 405 Cameron Street) is a three-story townhouse-style building, owned by the City and located at the corner of North Royal Street and Cameron Street. The property is zoned for CD-Commercial Downtown, which allows for residential, commercial or mixed uses and is a building that will require significant renovation for any future use.
The upper two floors of the building were formerly used by the City as the administrative offices for the Office of Historic Alexandria (OHA) and Information Technology Services (ITS) training classrooms and most recently as office space for the Department of General Services. The ground level retail space is currently being leased to Elder Crafters of Alexandria on a month-to-month basis.
At the May 26, 2009 legislative session, City Council declared 200 N. Royal Street surplus property and authorized the City Manager to seek bid offers as described in the City Real Estate Disposition Policy.
Following a public solicitation for the sale of the property for a period of thirty days, no responses to the solicitation were received and as a result staff recommended, as allowed for in
the City Real Estate Disposition Policy, to sell the property through a real estate agent to ensure a greater reach for marketing the property. In order to proceed with that process, the Department of General Services issued and received responses to a solicitation to provide real estate consulting services for the City from local real estate agents. A staff interagency interview panel selected three qualified real estate agents that would be chosen for City real estate sales projects via a rotating selection process. Based on this process, an award was made to Christopher Campagna of Tartan Properties (later Braddock Commercial Real Estate Services) in November, 2011 to sell the City-owned property at 200 N. Royal Street.
DISCUSSION: The property at 200 N. Royal Street was initially listed at $1,400,000; appraised at $1,200,000; and assessed at $1,127,916. After actively marketing the sale of the property, real estate agent, Christopher Campagna, provided General Services with a summary of the three initial offers that were received from potential buyers with offers ranging from $1,127,916 to $1,200,000, or 14 to 19 percent below the list price. Following a discussion with City staff regarding the offers, the decision was made to issue a counteroffer of $1,250,000 on behalf of the City to the three offerors. Following the receipt of counteroffers, which resulted in offers ranging from $1.2 million to $1.25 million, and additional interest and inquiries from other potential buyers who had not yet submitted an offer, the decision was made to provide all of the potential buyers the opportunity to submit their best and final offers with a deposit of 5 percent per the City's Real Estate Disposition Policy, no later than Wednesday, December 5, 2012 at 3:00 p.m. On December 5th, the City received best and final offers from three potential buyers ranging from $800,000 to $1,350,000. Based on the highest offer and with regard to price only, staff recommends that the City accept TTR Sotheby's International Realty's offer of $1,350,000.
The real estate agent has completed the draft contingent sales contract for staff review and has submitted the required five percent deposit from the potential buyer. The property listing has been updated as "Under contract pending City approval" with notification provided to the other potential buyers of the property's status. With City Council approval, the City Manager will enter into a contract with TTR Sotheby's International Realty for the sale of 200 N. Royal Street, in the amount of $1.35 million, contingent upon approval of the sale per Section 9.06 of the City Charter. This process anticipates consideration by the Planning Commission on February 5, 2013, to review conformance with the City's Master Plan. City Council will then have a first reading of an ordinance for the sale on February 12, 2013, with second reading at the Saturday, February 23, 2013 Public Hearing.
FISCAL IMPACT: The net proceeds after commission and closing costs are anticipated to be $1,228,500 based on acceptance of the highest offer. Per the adopted City Real Estate Disposition Policy proceeds will be designated as a source of funds in the City's Capital Improvement Program.
ATTACHMENT: None
STAFF:
Jeremy McPike, Director, Department of General Services
Alfred Coleman, Deputy Director, Department of General Services
Michael Stewart, Division Chief, Department of General Services
Al Cox, Historic Preservation Manager, Planning and Zoning
Gwen Wright, Division Chief, Planning and Zoning
Bryan Page, Deputy Director, Real Estate Assessments
Eric Keeler, Division Chief, Office of Housing
Val Hawkins, President and CEO, Alexandria Economic Development Partnership (AEDP)