AGENDA #2a

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

 

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

 

DATE:             March 7, 2005

 

 

Tonight’s Public Hearing is for the purpose of hearing comments on the proposal to sell approximately 1.1 acres of Pritchard Park to the Siena Hotel under the provisions of North Carolina General Statute 158-7.1. The Siena Hotel has proposed to purchase the property from the Town in order to allow expansion of the hotel, construction of a parking deck, and creation of a formal garden.

 

Following the hearing, the Council could authorize the Manager to proceed with the proposed land sale. The attached Resolution would authorize the Manager to negotiate and execute an agreement to sell to Siena Limited Partnership (the Siena Hotel) approximately 1.1 acres of the Town’s Pritchard Park property pursuant to the provisions of North Carolina General Statute 158-7.1.

 

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 Town 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 two 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.

 

On February 14, 2005, the Council designated approximately 1.2 acres of the Town’s Pritchard Park property an economic development area as is indicated on the attached map. Reserving the area as an economic development area allows the Council to negotiate a land sale directly with the Siena Hotel under the provisions of North Carolina General Statute 158-7.1. The Council also authorized the Town Manager to schedule a Public Hearing for this evening to hear comments on a proposal to sell the property to the Siena Hotel.

 

DISCUSSION

 

Proposed Land Sale:  On February 14, 2005, the Council designated approximately 1.2 acres of the Town’s Pritchard Park property an economic development area to allow the Council to negotiate a land sale directly with the Siena Hotel under the provisions of North Carolina General Statute 158-7.1. 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.

 

The Statute requires that the public hearing be advertised with at least 10 days notice. Notice was placed in the Chapel Hill News on February 23, 2005. 

 

Economic Impact of the Proposed Sale: The Siena Hotel is a locally owned and operated hotel that has been in operation since 1987. The sale of the land would allow the owner of the hotel to expand the facility to include additional rooms and banquet facilities. The Siena Hotel believes that the expansion would allow them to provide local services to visitors that might otherwise choose to stay in facilities outside of Chapel Hill.

If the hotel expansion takes place, they estimate that they will add 20 to30 staff positions to serve the additional guests at an average of $9.50 per hour. This equates to an increase in annual payrolls of about $400,000.

 

The hotel estimates that the expansion would result in annual additional revenues of about $2,500,000 per year. The Town would benefit by increases in property, sales, and occupancy tax revenues.

 

Potential Impact on the Town’s Pritchard Park: 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. We believe that it would be possible to both build an art garden and to sell the property needed by the Siena Hotel.

 

Recommended Conditions for a Sale to the Siena Hotel: If the Council agrees to sell the property we recommend that the Council make the transaction contingent upon completion of the following conditions by both parties:

 

  1. Upon execution of the agreement, the Siena Hotel would 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 park design costs.
  2. The Siena Hotel would make a $50,000 deposit toward purchase of the property within 60 days of the execution of the agreement. A provision of the agreement would 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 or rezone the property.
  3. 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.
  4. 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.
  5. Before the land is transferred, the Council would have to grant a Special Use Permit 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 would be sold to the Siena Hotel.
  6. The agreement would expire if the Siena Hotel fails to secure a Special Use Permit by December 31, 2007.
  7. The Council would have to rezone the property to be sold to the Siena Hotel from Residential 1 (R-1) to Community Commercial (CC).
  8. The Siena Hotel would make a gift of $85,000 for the art garden prior to the sale of the land.
  9. 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, which would authorize the TownManager to execute an agreement to sell approximately 1.1 acres of Pritchard Park to Siena Limited Partnership with conditions.

 

ATTACHMENTS

 

1.      Vicinity map (p. 7).

2.      Map showing proposed area of sale (p. 8).

 

 

A RESOLUTION AUTHORIZING THE MANAGER TO EXECUTE AN AGREEMENT TO SELL APPROXIMATELY 1.1 ACRES OF PRITCHARD PARK TO SIENA LIMITED PARTNERSHIP (SIENA HOTEL) WITH CONDITIONS (2005-03-07/R-1)

 

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 1.1 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, the Council determines that the additional employees that would be hired by the Siena Hotel would receive an average salary of $9.50 per hour; and

 

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

 

WHEREAS, on February 14, 2005, the Council designated the property in question as an Economic Development Area; and

 

WHEREAS, the Council determines that the fair market value of the property is $489,323 per acre; 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 authorizes the Town Manager to execute an agreement to sell approximately 1.1 acres of Pritchard Park to Siena Limited Partnership with the following conditions:

 

·       Upon execution of the agreement, the Siena Hotel would 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 park design costs.

·       The Siena Hotel would make a $50,000 deposit toward purchase of the property within 60 days of the execution of the agreement. A provision of the agreement would 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 or rezone the property.

·       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.

·       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.

·       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 would be sold to the Siena Hotel.

·       The agreement would expire if the Siena Hotel fails to secure a Special Use Permit by December 31, 2007.

·       The Council would have to rezone the property to be sold to the Siena Hotel from Residential 1 (R-1) to Community Commercial (CC).

·       The Siena Hotel would make a gift of $85,000 for the art garden prior to the sale of the land.

·       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.

 

This the 7th day of March, 2005.