Response to Council Member Questions Request to Buy .4 Acres of Town Land Adjacent to the Bolin Creek Trail

On August 28, 2000 the Council considered a proposal to sell .4 acres of Town-owned property to the Curve Inn LLC, owners of the Café Driade. Curve Inn LLC desires the additional property in order to have enough land to meet floor area ratio requirements for a proposed new office building on the site.

· What level of review would be expected if the petitioner were to submit an application to construct a new building on the site?

An application for additional development for this property would likely be in the form of a Site Plan Review application, for which final action would be by the Planning Board. If the proposed addition of floor area were to exceed 20,000 square feet, or if the proposed new disturbed land area were to exceed 40,000 square feet, such application would need to be a Special Use Permit application, with final action by the Town Council. It does not appear likely, however, that an application on this site would exceed either of these threshold conditions, either now or with the additional land that the Town might sell. Therefore, it is most likely that an application of the kind that is anticipated would go only to the Planning Board for review and action.

· What size office building could be built on the site with the current acreage?

Staff Response: The site currently contains two buildings that total 4,650 square feet of commercial space. The Land Use Intensities in the Development Ordinance indicate that the land area would support a third 12,455 square foot office building, subject to a determination of compliance with other rules and issuance of necessary permits.

· What size office building could be built if the Town sells the additional property?

Staff Response: The Land Use Intensities in the Development Ordinance indicate that, if the Town sells the additional .4-acre of land to Curve Inn LLC, the land area would support a new structure of approximately 16,465 square feet in size in addition to the two structures already on the site. This proposal would also be subject to a determination of compliance with other rules and issuance of necessary permits. This building would be approximately 4, 010 square feet larger in size than could be built without the proposed land sale. Curve Inn LLC indicates that, if they are able to complete the proposed purchase of Town land and obtain necessary approvals, they plan on building a structure that is approximately 15,000 square feet in size.

· What uses could Curve Inn LLC make of the .4-acre parcel that is currently owned by the Town?

Staff Response: We believe the very steep nature of the Town property limits the potential use of the land. In addition, we recommend that the Council condition any sale by requiring deed restrictions, dedication of a greenway easement, and designation of the parcel as open space. However, with the Town’s permission, Curve Inn LLC could possibly use the property to extend utilities or construct a deck with restaurant seating. It would be up to the Council as to what type of restrictions it would want to require. We have modified the attached resolution to include two additional safeguards over the property prior to any sale to Curve Inn LLC: the purchaser would be required to grant a greenway easement over the property to the Town and would be required to designate the land as open space as part of the development process.

1. Resubmitted August 28, 2000 agenda item - Request to Buy .4 Acres of Town Land Adjacent to the Bolin Creek Trail (begin new page 1).

SUBJECT: Proposal to Sell 0.4 Acre of Town Land Adjacent to the Bolin Creek Trail

The attached resolution would indicate the Council’s intent to sell approximately 0.4 acre of Town-owned land adjacent to the Bolin Creek Trail to the highest bidder, and would authorize the Manager to take all actions required by State law to sell the property.

BACKGROUND

In 1991, the Town purchased 10 acres of land, known as the Danziger tract, for construction of Phase II of the Bolin Creek Trail. This land is located north of Franklin Street, east of Elizabeth Street and the Village Green condominiums, south of Bolin Creek, and west of Meadowbrook Street. Please see the attached map. The Town paid $100,000, or $10,000 per acre for this tract using 1989 Park Bond funds.

In 1998, the Town completed construction of the Bolin Creek Trail, which parallels Bolin Creek from Airport Road to the Community Center Park.

In 1998, the Council approved the sale of 0.2 acre of property to the owners of the Café Driade and authorized the construction of a trail to join the Café to the Bolin Creek Trail. The land purchased from the Town is currently being used by the Café as an outside seating area that overlooks the Bolin Creek valley and trail. Both the land sale and the trail construction were completed in 2000.

DISCUSSION

In April 2000, the principals of the Curve Inn LLC, who are the owners of the Café Driade property, petitioned the Council to purchase an additional 0.4 acres of Town land adjacent to the Bolin Creek Trail (Danziger tract) and to the parcel owned by Curve Inn LLC. Please see the attached copy of their April 4, 2000 letter. The petitioners would use the additional property to increase the overall acreage of their adjacent property. This would be done in order to meet minimum floor area ratio requirements for the purpose of constructing an office building on the site.

The 0.4 acre of Town property in question is primarily a steep slope directly above the Bolin Creek Trail. The tract is contiguous to the Café Driade property line and is adjacent to the existing Café Driade building. As proposed by the petitioners, the 0.4-acre parcel would not be disturbed or developed in any manner.

We believe that, if the following restrictions were required, this property could be sold in a manner that would financially benefit the Town without impacting the open space area or negatively affecting persons using the Bolin Creek Trail. If the Council chooses to pursue a possible sale of this property we would recommend the following conditions:

· The eventual purchaser would pay all direct costs of the transaction, including appraisals, surveying, recordation fees, and other costs, whether or not the sale ultimately occurs.

· If the sale occurs, the purchaser would pay the higher of either fair market value as determined by a professional appraiser licensed in North Carolina or the Town’s purchase price of $10,000 per acre.

· Deed restrictions would be placed on the 0.4-acre tract that would prevent any tree cutting, extension of utilities or other land disturbances, except that removal of diseased or dangerous trees would be permitted. Other activities could be allowed with the permission of the Town.

Proposed Office Building: If the land were eventually sold to the petitioners, the Town would have no obligation, related to this proposed land sale, to approve any development. The owner would still have to follow the appropriate process for approval of any new structure on the combined properties. However, by combining the acreages of both properties the petitioners could potentially increase the maximum floor area of any proposed new building.

Although we understand that the developer is contemplating building an office building, we have not received an application for additional development on this site.

Possible Use of Proceeds: The original source of funds for the purchase of the Danziger tract came from 1989 Parks Bond funds. If the Council chooses to sell this parcel, the funds must be used for some sort of parks or open space capital project. The Greenways Commission recommended that any funds be used for the Greenways program. Please see attached Greenways Commission recommendations.

Next Steps: If the Council adopts the following resolution indicating the Council’s intent to sell 0.4 acre of Town property, we would anticipate the following process and schedule; as prescribed by North Carolina General Statutes:

· The petitioners would have the property appraised by a professional appraiser licensed in North Carolina. The Town would have the right to approve the appraiser selected by the petitioners.

· The petitioners would place a deposit of 5% of the proposed purchase price with the Town Clerk.

· The Town would place an advertisement in a local newspaper that would describe the proposed transaction and give other interested parties 10 days to submit an upset bid. The petitioners would reimburse the Town for the cost of the advertisement.

· If an upset bid were offered, the Town would follow a procedure that is described in State law §160A-269. The process allows for additional opportunities for parties to bid on the property until such time as no party is willing to offer an additional upset bid.

· At the conclusion of the bid process, the Council could accept the highest offer, or could reject any and all bids.

· If the petitioners have the sole or highest bid they could then design their proposed building and start the development review process. If the Town permits the proposed building the petitioners could then make their final payment (the remaining 95% of the agreed upon price).

· If the development review process were not completed or if the development application were not approved, the petitioners would have the option of completing the transaction or forfeiting their 5% deposit.

RECOMMENDATIONS

Greenways Commission: On June 14, 2000, the Greenways Commission voted unanimously (6-0) to recommend that the Council agree to sell the 0.4-acre tract of Town-owned land with conditions. Please see attached recommendations.

Manager’s Recommendation: That the Council adopt the attached resolution, which would indicate the Council’s intent to sell the 0.4 acre of land with the conditions described above and start the land sale process prescribed by State law, with any proceeds to be used for greenways.

ATTACHMENTS

A RESOLUTION INDICATING THE COUNCIL’S INTENT TO SELL 0.4 ACRE OF PROPERTY FOR FAIR MARKET VALUE AND AUTHORIZING THE MANAGER TO FOLLOW THE PROCESS FOR SALE OF LAND AS PRESCRIBED BY STATE LAW (2000-08-28/R7)

WHEREAS, the Curve Inn LLC has offered to purchase 0.4 acres of land owned by the Town of Chapel Hill; and

WHEREAS, the Curve Inn LLC has offered to pay to the Town the fair market value of the land; and

WHEREAS, the Curve Inn LLC has offered to pay for all legal, surveying, and recordation costs associated with sale of the land; and

WHEREAS, the Curve Inn LLC has agreed to accept certain deed restrictions that would go with the land in perpetuity; and

WHEREAS, sale of the land would not diminish the experience of patrons using the Bolin Creek Trail or reduce open space along Bolin Creek;

NOW THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby indicates its intent to sell 0.4 acres of property for the higher of fair market value or $10,000 per acre and other considerations, which include:

· The petitioners would have the property appraised by a professional appraiser licensed in North Carolina. The Town would have the right to approve the appraiser selected by the petitioners.

· The eventual purchaser would pay all direct costs of the transaction, including appraisals, surveying, recordation fees, and other costs, whether or not the sale ultimately occurs.

· If the sale occurs, the purchaser would pay fair market value for the property as determined by a professional appraiser licensed in North Carolina.

BE IT FURTHER RESOLVED by the Council that any proceeds of the proposed land sale be allocated to the Town’s Greenways program.

BE IT FURTHER RESOLVED by the Council that this sale of land, if completed, does not imply any commitment on the part of the Town to approve development of this or adjacent properties.