AGENDA #4e

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:       Proposed Sale of a Portion of Pritchard Park to the Siena Hotel

 

DATE:             February 14, 2005

 

The attached Resolution A would designate approximately 1.2 acres of the Town’s Pritchard Park property an economic development area. Please see the attached map. Reserving the area as an economic development area would allow the Council to negotiate a land sale directly with the Siena Hotel under the provisions of North Carolina General Statute 158-7.1.

 

Resolution B would authorize the Manager to schedule a Public Hearing on March 7, to hear comments on a proposal to sell the property to the Siena Hotel.

 

BACKGROUND

 

In 1996, the Town began the planning process to develop the Pritchard Park program.  The process was halted in April 1996, when the owner of the Siena Hotel petitioned the Council to consider leasing or selling a portion of the park property to the Hotel. In 1997, the Council decided to postpone a decision until after completion of a concept plan for the park.

 

A Pritchard Park Conceptual Plan Committee was formed. On November 27, 2000, the Council adopted the Report of the Pritchard Park Conceptual Plan Committee. At that time the Council authorized the Manager to complete a plan for development of an art garden and to involve the Chapel Hill Public Arts Commission, the Library Board, and the Parks and Recreation Commission.

 

On November 25, 2002, the Council adopted the Report of the Pritchard Park Art Garden Committee. The Pritchard Park Art Garden Committee consisted of 2 members each of the Public Arts Commission, the Library Board, and the Parks and Recreation Commission. The Committee investigated a variety of options for designing the proposed art garden including options that would involve a partnership with the Siena Hotel and options that did not involve the hotel. The Committee voted unanimously (6-0) to recommend that the Town partner with the Siena Hotel in a manner that would allow a seamless transition between the designs of the two properties, provide funding for the Town’s park and art project, and allow the Siena Hotel to address its parking needs.

 

On March 22, 2004, the manager of the Siena Hotel petitioned the Council requesting further discussions concerning a proposed public-private partnership for development of Pritchard Park and the Siena Hotel. On April 14, 2004, the Council responded by authorizing the Town Manager to enter into further discussions with the management of the Siena Hotel and formed a new Pritchard Park Art Garden Committee consisting of two members each of the Public Arts Commission, the Library Board, and the Parks and Recreation Commission.

 

On November 22, 2004, the Council adopted the Report of the Second Pritchard Park Art Garden Committee and authorized the Town Manager to take a number of actions to begin implementation of the plan including investigation of the process that would be required to allow the Town to sell land to the Siena Hotel with conditions. The Council also directed the Town Manager to include an item in the Town’s capital improvements program budget for FY 2005-06, that if enacted, would earmark parking lot lease funds on Pritchard Park to the Pritchard Park project.

 

DISCUSSION

 

The Town is ready to begin work on a Special Use Permit modification for Pritchard Park that, if enacted, would enable construction of an art garden in the area behind the Siena Hotel. The Siena Hotel has proposed to purchase about 1.1 acres of land from the Town in order to allow expansion of the hotel, construction of a parking deck, and creation of a formal garden. We believe that it would be possible to both build an art garden and to sell the property needed by the Siena Hotel.

 

Legal Requirements for a Land Sale:  On November 22, 2004, the Council authorized the Town Manager and Town Attorney to investigate the process that would be required to allow the Town to sell land to the Siena Hotel with conditions. We believe that the most efficient way to sell the property to the Siena Hotel would be to use the provisions of North Carolina General Statute 158-7.1 and declare that the property in question is an economic development area. Once the Council has established the area in question as an economic development area, the Council could then negotiate directly with the Siena Hotel concerning a possible land sale, as long as the purpose of the sale is to improve the condition of the local economy. We believe that this Statute is appropriate because the land sale would allow the Siena Hotel to expand operations and contribute to the local economy. However, the sale could not be completed until such time as the boundaries of the Town Library’s Special Use Permit are modified to remove from the Special Use Permit the parcel that is designated an economic development area.

 

If the Council establishes the property in question as an economic development area, we would then schedule a Public Hearing to hear comments on the proposal with 10 days public notice. The public notice and the information presented at the Public Hearing would include the terms of the proposed agreement and the anticipated economic benefits of the sale. Resolution B would establish a Public Hearing date of March 7.

NEXT STEPS

 

If the Council agrees to sell the property we would likely utilize the following process to complete the transaction:

 

  1. If the Council establishes the economic development area this evening, we could schedule a Public Hearing for March 7. On that date, the Council could authorize the Manager to execute an agreement between the Town and the Siena Hotel with all the terms and conditions required by the Council and the law.
  2. The Town and the Siena Hotel would then execute an agreement that would describe the terms of the sale.
  3. Upon execution of the agreement, the Siena Hotel would then make a payment of $15,000 to the Town to reimburse the Town for past design and staff costs related to this proposal. This amount would be paid within 30 days of execution of the agreement and would not be refundable. These funds would be used to pay part of the Town’s design costs.
  4. The Siena Hotel would also make a $50,000 deposit within 60 days of the execution of the agreement. A provision of the agreement could include language that $20,000 of the deposit would be non-refundable if the Siena Hotel elects not to proceed with the project or fails to submit an application for a Special Use Permit by December 31, 2005. The entire deposit would be returned in the event that the Siena Hotel submits a complete Special Use Permit application prior to December 31, 2005, but the Council does not grant the permit.
  5. Both the Siena Hotel and the Town would begin work on their respective Special Use Permit applications upon execution of the agreement. Every reasonable effort would be made to submit the applications at the same time. Review of the applications by the Town would occur simultaneously.
  6. The agreement would include language that both parties would support provisions in the Special Use Permits that would guarantee that all buffers be provided on the Siena Hotel side of the property line or that the Siena Hotel pay for the costs of the Town’s buffer requirements on the Pritchard Park/Siena Hotel boundary as the Town develops Pritchard Park.
  7. Before the land is transferred, the Council would have to grant a Special Use Permit application to the owners of the Siena Hotel. At the same time the Council would have to modify the Chapel Hill Library’s Special Use Permit to change the boundary of the existing permit to remove from the Special Use Permit the parcel that is designated an economic development area.
  8. The agreement would expire if the Siena Hotel fails to secure a Special Use Permit by December 31, 2007.
  9. The Council would have to rezone the property to be sold to the Siena Hotel from Residential 1 (R-1) to Community Commercial (CC).
  10. The Siena Hotel would make a gift of $85,000 for the art garden prior to the sale of the land.
  11. The land sale would take place within 60 days of Council’s granting of a Special Use Permit for the Siena Hotel, the modification of the Library Special Use Permit, and the rezoning of the property. The Siena Hotel would pay to the Town the amount of $489,323 per acre as established by a survey.

 

 

 

 

RECOMMENDATION

 

Manager’s Recommendation: That the Council adopt the attached Resolution A, which would declare that approximately 1.2 acres of Town property, currently a part of Pritchard Park, is an economic development area.

 

If the Council adopts Resolution A, the Town Manager recommends that the Council also adopt Resolution B, which would authorize the Town Manager to schedule a Public Hearing on March 7, to hear comments on the proposal to sell property to the Siena Hotel.

 

ATTACHMENTS

 

1.      Map showing proposed area for designation as an economic development area (p. 7).

 

 

RESOLUTION A

 

A RESOLUTION DECLARING THAT APPROXIMATELY 1.2 ACRES OF PROPERTY THAT IS PART OF THE TOWN’S PRITCHARD PARK IS NOW DESIGNATED AS A ECONOMIC DEVELOPMENT AREA (2005-02-14/R-5a)

 

WHEREAS, on November 22, 2004, the Council adopted the Report of the Second Pritchard Park Art Garden Committee; and

 

WHEREAS, the Report recommends that the Town sell approximately 1.117 acres of property to the Siena Hotel in order to allow the hotel to expand its operations; and

 

WHEREAS, the expansion of the Siena Hotel would provide additional employment opportunity in the community; and

 

WHEREAS, the expansion of the Siena Hotel would expand the Town’s property tax base and increase revenues to the Town from sales and occupancy taxes; and

 

WHEREAS, it would be in the public interest to provide the Siena Hotel an opportunity to expand its operations; and

 

WHEREAS, the expansion of the Siena Hotel could be accomplished in a manner that would still allow development of a Town art garden within Pritchard Park;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council declares that approximately 1.2 acres of property, as shown on the sketch map incorporated in the Manager’s February 14, 2005 memorandum entitled Proposed Sale of a Portion of Pritchard Park to the Siena Hotel, is now designated as an economic development area.

 

This the 14th day of February, 2005.

 

 

RESOLUTION B

 

A RESOLUTION SCHEDULING A PUBLIC HEARING TO HEAR COMMENTS CONCERNING A POSSIBLE SALE OF LAND TO THE SIENA HOTEL (2005-02-14/R-5b)

 

WHEREAS, on November 22, 2004, the Council adopted the Report of the Second Pritchard Park Art Garden Committee; and

 

WHEREAS, the Report recommends that the Town sell approximately 1.117 acres of property to the Siena Hotel in order to allow the hotel to expand its operations; and

 

WHEREAS, it might be in the public interest to provide the Siena Hotel an opportunity to expand its operations; and

 

WHEREAS, the expansion of the Siena Hotel could be accomplished in a manner that would still allow development of a Town art garden within Pritchard Park; and

 

WHEREAS, the Council has declared the 1.2 acres in question an economic developments area;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to schedule a Public Hearing on March 7, 2005 to hear comments on a proposal to sell approximately 1.117 acres of property to the Siena Hotel.

 

This the 14th day of February, 2005.