CRA Authorizes Notice of Proposed Sale of O'Connell Parcel

CRA Authorizes Notice of Proposed Sale of O'Connell Parcel


"Statement of Issue In January 2010, the City of Tallahassee Community Redevelopment Agency (CRA) purchased the O’Connell property located at 402 W. Gaines St. for $4.65 million dollars. The property, which is immediately south of the Donald L. Tucker Civic Center (Civic Center) is a vacant 5.3 acre parcel within the All Saints – D (AS-D) zoning district.  The AS-D zoning district encourages the creation of a high-intensity urban activity corridor with a pedestrian orientation. Permitted uses in the district include; mixed uses, colleges, universities, restaurants, and office and entertainment establishments.  The property is located within the Greater Frenchtown/Southside Community Redevelopment Area.

In the summer of 2012, Florida State University (FSU) acquired ownership of the Civic Center, although operation of the Civic Center remained under the Tallahassee-Leon County Civic Center Authority (TLCCC).  In the summer of 2013, the TLCCC Authority was repealed and FSU assumed management of the Civic Center.  Starting in 2012, FSU began examining master planning options for the Civic Center.  This eventually led to the Arena District Concept in early 2013, which included conceptual redevelopment plans for the Civic Center and adjacent properties, including the O’Connell property.

In mid-2013, FSU approached the CRA and expressed an interest in exploring the possibility of purchasing the former O’Connell site from the CRA for a combination of cash and the exchange of land along Gaines Street that is owned by FSU.  Since that time, CRA staff, led by the City Manager and City Commissioner and CRA Board Member Andrew Gillum, has been discussing the possible sale and transfer of the property.  Staffs believe we are at a point now where there are sufficient details regarding the proposed O’Connell land sale, property transfers and proposed FSU redevelopment of the Donald L. Tucker Civic Center to present to the CRA Board for consideration and discussion, prior to the presentation of a final proposal by FSU.   

Based on recent appraisals prepared for FSU, and verified by the Florida Department of Environmental Protection, Bureau of Lands Management, the O’Connell property has an appraised value of $5,810,000.  FSU, CRA and City staffs have developed a proposal that involves the sale of the O’Connell property at 402 West Gaines Street from the CRA to FSU for $960,000 in cash and the transfer of the Firestone Building and Bloxham Annex properties on east Gaines Street and 715 East Gaines Street, which have a combined appraised value of $4,850,000, from FSU to the CRA.

 

The immediate purpose of this agenda item is to update the CRA Board on the anticipated FSU offer for the O’Connell property, and have the Board members provide staff with direction as the negotiations enter their final stages. 

Prior to its sale of any property, by statute the CRA must give notice to the public of its intent to dispose of the property and must request competing offers. The notice of intent to dispose of CRA property must be published in the newspaper for at least 30 days prior to the execution of any contract.

Due to the required statutory notice, which applies in any case, staff is requesting authorization to publish the notice concerning sale of the O'Connell property. Although the CRA must publish the notice, the CRA will have discretion as to which offer it may choose to accept. Additionally, although the CRA can discuss potential terms with a prospective purchaser prior to publication of the notice, the statute precludes the CRA from entering into a contract until it has satisfied the notice requirement.

Recommended Action

Option 1 - Authorize CRA staff to notice the proposed sale of the O’Connell property consistent with the Chapter 163.380(3)(a).   

Fiscal Impact

At this point, there is no fiscal impact.  However, if the sale and property transfer is eventually approved by the CRA and FSU, the CRA will receive a total of $5,810,000 in cash ($960,000) and land value ($4,850,000).  If the exchange is completed, it will result in a generally equivalent exchange of property and other considerations which can be used in future CRA projects.  Once transferred to the CRA, staff expects to quickly market the new properties for redevelopment.  The fiscal impact to the CRA will include both the sale of the properties to private developers and the future tax increment that will be generated when the properties are developed and added to the tax rolls.

CRA Proposal Presented to FSU

Based on recent appraisals prepared for FSU, and verified by the Florida Department of Environmental Protection, Bureau of Lands Management, the O’Connell property has an appraised value of $5,810,000.  In response to FSU’s interest in purchasing the O’Connell property to assist in the development and implantation of their Arena District concept, CRA staff, led by the City Manager and Commissioner Gillum, has had a series of meetings and discussions with FSU leadership and staff.  From those discussions, the CRA has provided FSU with a proposal to sell the O’Connell property to FSU for its appraised value of $5,810,000 in cash and property exchanges by FSU to the CRA, as described below, pending CRA Board approval. 

• Cash from FSU - $960,000.  

• Firestone and Bloxham Annex Properties - Appraised value of $4,080,000.  These properties are on East Gaines Street immediately adjacent to Cascades Park (Attachment 1 and 4).  Initial discussions with several developers indicate these properties have very strong potential for redevelopment as mixed-use market rate condominiums or apartments.  There may be some environmental contamination in the area, but that will be addressed as part of the due diligence investigation that would occur as part of a sales and exchange agreement.

• 715 West Gaines Street – Appraised value of $770,000.  This property (Attachment 1 and 5) is in the middle of existing and proposed developments by North American Properties; developers of the Deck and Block projects on Gaines Street.  The property currently houses offices of the FSU School of Social Work.  Given its location within an area undergoing major redevelopment, this property should be of interest to developers.  The CRA may need to assist in the relocation of the current building operations.  Given that most of this part of Gaines Street has a history of rail uses, there is the possibility of some environmental contamination in the area, especially arsenic, but that will be addressed as part of the due diligence investigation that would occur as part of a sales and exchange agreement.

At this point, FSU appears favorably inclined towards the CRA offer and is proceeding with a formal purchase offer for presentation to the CRA Board at a future date.  In addition, they are planning to present the proposal to the FSU Board of Trustees and the Board of Trustees for the Internal Improvement Trust Fund (TIITF) for approval during the summer, although firm dates for these presentations have not yet been scheduled. 

Other Considerations

In addition to the details of the proposed O’Connell land sale and property exchanges, there are several other issues for consideration and approval by CRA Board members.

It is important to note that the O’Connell property and 715 West Gaines Street are both located within the Greater Frenchtown/Southside Community Redevelopment Area, while the Firestone Building and Bloxham Annex properties are located within the Downtown CRA District Community Redevelopment Area.  Because the O’Connell property is the property being proposed for sale to FSU and the property is in the Greater Frenchtown/Southside Community Redevelopment Area, the $960,000 in cash proceeds (less closing costs) from the sale of the O’Connell property and the potential sale of the 715 West Gaines Street, the Firestone Building and Bloxham Annex properties will be deposited in the Greater Frenchtown/Southside Community Redevelopment Trust Fund for reinvestment within the Greater Frenchtown/Southside Community Redevelopment Area; any funds from the sale of the Firestone Building and Bloxham Annex properties will not be used within the Downtown District Community Redevelopment Area. 

Prior to its sale of any property, by statute the CRA must give notice to the public of its intent to dispose of the property and must request competing offers. The notice of intent to dispose of CRA property must be published in the newspaper for at least 30 days prior to the execution of any contract.

Due to the required statutory notice, which applies in any case, staff is requesting authorization to publish the notice concerning sale of the O'Connell property. Although the CRA must publish the notice, the CRA will have discretion as to which offer it may choose to accept. Additionally, although the CRA can discuss potential terms with a prospective purchaser prior to publication of the notice, the statute precludes the CRA from entering into a contract until it has satisfied the notice requirement.

Review by Citizens’ Advisory Committee

The potential sale terms of the O’Connell property was presented to the Greater Frenchtown/Southside Community Redevelopment Agency’s Citizens’ Advisory Committee on April 14^th for information only. No major objections were raised by the committee members. They expressed general support for the exchange but had questions regarding the final development concept, tax increment that would be generated by the development, and the final structure and equivalent values of the proposal."