to: Roger L. Stancil, Town Manager
from: Butch Kisiah, Parks and Recreation Director
Dwight Bassett, Economic Development Officer
Ralph D. Karpinos, Town Attorney
subject: Response to Petition Offering to Purchase Town Property
date: January 12, 2009
The purpose of this report is to identify options for the Council to consider in response to a petition seeking to purchase a tract of land owned by the Town at the intersection of Mt. Carmel Church Road and Bennett Road.
On November 24, 2008 the Council received a petition on behalf of Christ Community Church expressing an interest in purchasing a tract of land of approximately 9 acres at the corner of Bennett Road and Mt. Carmel Road. The petition included a draft letter of intent proposing a written agreement for the purchase. Please see Attachment 1. The petition was referred to the Manager and Attorney for review and evaluation.
The proposal from Christ Community Church is to purchase approximately 9 acres for $475,000. The Church’s offer states that it would use the property to construct a house of worship for its congregation and other uses associated with a house of worship. The petition includes a concept plan showing how the Church might use the property.
If the Council is interested in considering the proposed offer to purchase from the Church, there are a number of options available under State Law to sell Town owned real property. These include:
Under both of the bid options and the auction, a sale, if it does occur, must be to the highest bidder. (The exchange option is available in situations where it is proposed to trade one parcel of land is traded for another, which is not the case here.)
The detailed steps required for each of these options are set out in Chapter 160A, Article 12, Sections 160A-268 through 160A-271. In this particular case, given that a proposal has already been submitted, if the Council wishes to consider selling the property, the negotiated offer procedure would be the most appropriate to consider.
The procedures for sale based on a negotiated offer, advertisement and upset bid, are set out in N.C.G.S. Sec. 160A-269, which provides as follows:
§ 160A‑269. Negotiated offer, advertisement, and upset bids.
A city may receive, solicit, or negotiate an offer to purchase property and advertise it for upset bids. When an offer is made and the council proposes to accept it, the council shall require the offeror to deposit five percent (5%) of his bid with the city clerk, and shall publish a notice of the offer. The notice shall contain a general description of the property, the amount and terms of the offer, and a notice that within 10 days any person may raise the bid by not less than ten percent (10%) of the first one thousand dollars ($1,000) and five percent (5%) of the remainder. When a bid is raised, the bidder shall deposit with the city clerk five percent (5%) of the increased bid, and the clerk shall readvertise the offer at the increased bid. This procedure shall be repeated until no further qualifying upset bids are received, at which time the council may accept the offer and sell the property to the highest bidder. The council may at any time reject any and all offers.
Most of the tract, 8.1 acres, proposed for purchase by the Church was acquired by the Town in 2000. The land was gifted to the Town by Ernest and Hazel Craige. In our conversations with the Craige family at the time the property was donated they indicated that they were interested in seeing the property used for some public purpose such as open space, a park, or some public building. However, they made no such requirement as a condition of the donation.
Open space bond funds were used to cover closing costs ($2805.). Resolution 2000-09-25/R-5.1 accepting the gift stated the Town Council’s “gratitude to Ernest and Hazel Craige for their generous donation of important open space and entranceway property for the enjoyment of current and future citizens of Chapel Hill. The staff report on that date described the tract as having “significant value as an entranceway and conservation area” and said it “would be one of the few pieces of ridge-top open space in the Town’s open space inventory.”
Town staff believes the tract remains a valuable portion of our open space system and is somewhat unique in Chapel Hill because it is a rare example of publicly owned ridge-top property. In addition, it is the only significant open space property along the Mt. Carmel Church Road entranceway into Town. The Town’s Greenways Master Plan shows the property to be the north anchor of the future Wilson Creek Trail and would serve as the only major portion of the trail and open space system that would be removed from Wilson Creek.
A small portion of the tract proposed for purchase was acquired in 1998 and is part of the tract on which the fire station at Bennett Road and U.S. 15/501 is located. Open space bond monies were used for the portion which is not part of the fire station site. ($158,616)
We would expect that if this property were sold, the bond fund expenditures would be replenished up to the amount used for these two earlier acquisitions, in accordance with general Town policies where land is sold or transferred from one use to another.
In March, 2007 the Town received an inquiry from a private developer indicating an interest in purchasing this land and declined to consider selling it at that time.
The property is zoned R-LD1, a low density residential district. Permitted uses include, among others, single family dwellings, child and day care facilities, places of worship, and schools.
If the Council decides to proceed with the consideration of the disposition of this land and the property is sold, we anticipate that the proceeds, would be in the range of the amount of the initial offer from the Church, ($475,000) or perhaps higher, if other bids were received. Following the general policy of reimbursing the open space bond fund for the previous expenditures of $161,421, the remaining funds (currently estimated at $313,579 based on the initial offer) received in exchange for the land would be revenue to the General Fund. Because this is “one time” money, we believe it would be prudent to only use these funds for non-recurring expenditures that do not represent ongoing financial commitments.
If the Council is interested in considering the possible sale of this property we recommend that the Council direct the staff to have a conversation with the Church to develop possible conditions of a sale that address any interests the Council has regarding preservation of some portion of this land as open space. The results of that conversation would be reported back to the Council and if the Church makes an offer the Council wished to consider the Council could then initiate the process called for by N.C. G.S. Sec. 160A-269 for advertising the bid received for upset bids and having an appraisal of the property done. The attached resolution would authorize those conversations.