AGENDA #7.1(b)

MEMORANDUM

TO: Mayor and Town Council

FROM: W. Calvin Horton, Town Manager

SUBJECT: Proposed Cooperative Venture with the Siena Hotel Including Sale of Town Land

DATE: November 25 , 2002

The attached resolution would authorize the Manager to proceed toward a public/private partnership with the Siena Hotel including approval of a cost per acre of Town land that would be sold. The Council would have an opportunity to act on the recommendations of the Pritchard Park Art Garden Committee as soon as the design is revised to accommodate changes to the Resource Conservation District.

SUMMARY

This resolution comes in response to the Council’s direction to prepare a specific plan based on the Pritchard Park Conceptual Plan adopted in November 2000. If pursued to completion and approved in its final form, the partnership could result in:

The sale of about .562 acres of land currently a part of Pritchard Park to the Siena Hotel, conditioned on the issuance of a Special Use Permit for the hotel and a Special Use Permit Modification for Pritchard Park and on the rezoning of the land to Community Commercial.
A cash payment to the Town of $360,000. The payment would include $275,000 for the land plus a donation to the Town of $85,000.
The construction of a formal “Italian Garden” that would serve both guests of the hotel and users of the Town’s proposed art garden in Pritchard Park.
An additional 25-30 parking places suitable for use by park patrons, hotel guests, and hotel staff.

The attached resolution does not commit the Town to the sale of Town land or to approval of any Special Use Permit or Zoning Map Amendment. It would indicate concurrence in a sale price of $489,323 per acre for Town land. With that concurrence, staff would pursue the final design for presentation to the Council. The resolution includes language that would authorize the reestablishment of the Pritchard Park Art Garden Committee so that it can work on revisions to the plan needed to accommodate the anticipated revisions to the RCD regulations. The revised plan will be presented to the Council for its final action.

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. 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.

The Pritchard Park Art Garden Committee completed its Report in March 2002 and it has formed the basis for negotiations with the Siena Hotel. The 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 involved 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. Tonight, the Committee’s report is presented to the Council as a separate item.

In 2001, the Council leased 25 parking spaces on Town property to the Siena Hotel for $55 per space. In May 2002 the lease was extended and the price increased to $65 per space on a month-to-month basis until such time as the Council can decide broader issues related to the use of Pritchard Park property.

DISCUSSION

A central issue to this plan is the proposal to sell Town-owned land to the Siena Hotel. At the time the Pritchard Park Art Garden Committee completed its report in March 2002 the owner of the Siena Hotel had agreed in principle to all of the committee’s recommended conditions. The only remaining question was that of the fair market value of the land proposed for sale. The Town’s appraisal of the .562 acres of Pritchard Park that the committee recommended be sold to the owner of the Siena Hotel was $300,000.

Upon receipt of the Town’s appraisal the owner of the Siena Hotel commissioned his own appraisal, which determined that the Town’s appraiser had made no fundamental errors based on her assumptions. However, the owner of the Siena Hotel insisted that he believed the appraiser made an error when she assumed that the landlocked Pritchard Park property should be valued on the same basis as outparcels with road frontage that are suitable for construction of a new business. We met with the hotel’s owner and manager on November 4, 2002, and agreed to present to the Council a proposed price of $275,000 for the .562 acre tract, the equivalent of $489,324 per acre. In addition, the owner of the hotel agreed to present to the Town a gift of $85,000 as included in the committee’s recommendation, which would make his total contribution $360,000.

In addition to the financial aspects of the proposed transaction the Pritchard Park Art Garden Committee made several recommendations that we believe have merit. They recommend that the transaction be conditioned upon the following:

· The Town and the Siena Hotel should jointly design a space that merges the uses of the two properties in a coordinated and sensible manner. Parking, pedestrian travel, landscaping, and other issues would be planned as a single project rather than as two separate projects with different objectives.

Parking should be designed that would benefit both parties. The Siena Hotel would have the additional staff and guest parking it requires and the Town would have additional parking for its park, and specifically for the art garden. Language should be required in any agreement, deed, or Special Use Permit that would require the Siena Hotel to make this portion of its parking available to the public.
The partnership should generate funds for the Town that could be used to help pay for the Art Garden. Without the partnership there would be no funds available to begin the Art Garden project.
About .033 acres of Town and hotel land would be swapped in addition to the .562 acres that would be sold to the Siena Hotel.

· The Siena Hotel should make a significant cash payment to the Town in an amount and a manner that is satisfactory to the Town Council.

· The Siena Hotel would agree to a parking lot footprint that results in the smallest possible loss of trees. No large trees would be lost to parking lot construction.

· The Siena Hotel parking area and the formal seating and use area would be open for public use except when in use by the Siena.

· The Siena Hotel would agree to participate in the security and maintenance of the area.

· The Siena Hotel would agree to place signs that would direct the public to the parking lot in the rear of the Hotel for the purpose of parking for visitation of the art garden.

· The Siena Hotel should be responsible for all buffer requirements. We specifically recommend that the proposed land sale/trade with the Siena Hotel incorporate all buffers on the Hotel’s side of the new property line. If that is not possible there should be an agreement that would require the Siena Hotel to be responsible for the costs of providing the buffer on the Town side of the line.

Future plans should show pedestrian, bicycle, and emergency vehicle access.

Anticipated Need to Change the Recommended Plan: We anticipate that in January 2003 the Council will change the Resource Conservation District regulations so that the boundaries of the RCD on this site change from 75 feet to at least 150 feet. If this occurs, we believe that the committee’s plan would have to be significantly revised in order to avoid encroachment into the RCD. The attached resolution includes language that would authorize the reestablishment of the Pritchard Park Art Garden Committee.

With the Council’s agreement on the land price, and with the redesign of the plan to accommodate a 150’ RCD, we would present the recommended plan of the Pritchard Park Art Garden Committee.

NEXT STEPS

If the Council agrees to the principle of selling about a half acre of Pritchard Park property for the equivalent of $489,323 per acre we suggest the following process:

December 2002 – February 2003: A designer paid by the Siena Hotel would prepare 2-3 design options that avoid the RCD yet would preserve the intent of the committee’s recommended plan. Staff would review the options.

March 2003: The Committee would be asked to meet again, review the plans and make recommendations.

April 2003: A revised plan would be presented to the Council in their role as owners of the park property.

May 2003: Work would begin on a Special Use Permit modification for Pritchard Park and an initial Special Use Permit for the Siena Hotel.

May 2004: Completion of the parallel processes for a Special Use Permit for the Hotel Siena, a rezoning of the park land to be sold from R-1 to Community Commercial and a modification of the Pritchard Park Special Use Permit. Start working drawing and Zoning Compliance Permit processes.

September 2004: Bid Pritchard Park construction.

April 2005: Complete Pritchard Park.

RECOMMENDATION

Manager’s Recommendation: That the Council consider the attached resolution which would authorize the Manager to execute a letter of understanding with the owner of the Siena Hotel and proceed with a public/private partnership with conditions.

A RESOLUTION AUTHORIZING THE MANAGER TO PROCEED TOWARD A PUBLIC/PRIVATE PARTNERSHIP WITH THE SIENA HOTEL FOR JOINT DEVELOPMENT OF PRITCHARD PARK AND PARKING FOR THE SIENA HOTEL (2002-11-25/R-4.1)

WHEREAS, the Council desires to build Pritchard Park; and

WHEREAS, the Siena Hotel desires to increase its parking; and

WHEREAS, the Pritchard Park Art Garden Committee has recommended the development of an art garden on the park property adjacent to the Siena Hotel; and

WHEREAS, the Pritchard Park Art Garden Committee also recommended that the Council work with the Siena Hotel to plan and construct facilities that would enhance both the park and the hotel;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to proceed toward a public/private partnership with the Siena Hotel that would allow construction of an art garden in Pritchard Park and would allow the Siena Hotel to gain an additional 25-30 parking spaces conditioned on the issuance of a Special Use Permit for the hotel and a Special Use Permit Modification for Pritchard Park and on the rezoning of about one-half acre from R-2 to Community Commercial.

BE IT FURTHER RESOLVED that the Manager is authorized to execute a conditional letter of intent with the owner of the Siena Hotel that states the following conditions set by the Council:

The owner of the Siena Hotel must agree to submit a Special Use Permit application at the same time the Town submits a Special Use Permit Modification application for Pritchard Park. Both parties must agree to work together to ensure that the two permits are reviewed at the same time by the public, advisory boards, and the Council.
The Siena Hotel shall pay $489,323 per acre for any Town property.
The owner of the Siena must guarantee a donation of $85,000 to the Town. The Special Use Permit process for Pritchard Park shall not start until the $85,000 gift is placed in an escrow account suitable to the Town Manager.

· The Town and the Siena Hotel must jointly design a space that merges the uses of the two properties in a coordinated and sensible manner.

· The Siena Hotel must agree to make its additional parking available to the public.

· The Siena Hotel’s formal outdoor seating and use area that would be created by this partnership would be open for public use except when in use by the Siena.

· The Siena Hotel must agree to participate in the security and maintenance of the area.

· The Siena Hotel must agree to place signs that would direct the public to the parking lot in the rear of the Hotel for the purpose of parking for visitation of the art garden.

· The Siena Hotel must incorporate all buffers on the Hotel’s side of the new property line. If that is not possible there should be an agreement that would require the Siena Hotel to be responsible for the costs of providing the buffer on the Town side of the line.

Future plans should show pedestrian, bicycle, and emergency vehicle access to the parking areas and art garden.

BE IT FURTHER RESOLVED that the Town Council does not at this time commit to any sale of land nor to the approval of any Special Use Permit or Modification or Zoning Map Amendment; rather it commits to pursuing the process outlined above and if joint agreement is reached on all points, any land sold to the Siena shall be sold at the price of $489,323 per acre.

BE IT FURTHER RESOLVED that the Pritchard Park Art Garden Committee shall be reestablished for the purpose of making recommendations to the Council after review of revised plans that avoid the anticipated expansion of the Town’s Resource Conservation District.

This the 25^th day of November, 2002.