Posted: September 23, 2022
Rapid City
Agenda Item Summary

Agenda Item Ref. #: LF092822 07

Agenda Item Title:

Approve the Tentative Real Estate Purchase Agreement for Lots 4 & 5 of Owen Hibbard Subdivision and Authorize Mayor and Staff to Execute Any Documents Necessary to Complete the Transfer of the Property Consistent with the Purchase Agreement

Origination Group:
Legal & Finance Committee
Origination Meeting Date:
09/28/2022
City Council Hearing Date:
10/03/2022
Staff Contact:
Joel Landeen, City Attorney
Location:
Lots 4 & 5 of Owen Hibbard Subd.
Agenda Item Summary:
The Council previously declared the City owned lots on Promise Road, across from Fire Station 6, surplus and authorized their sale. At the first meeting in September, the Council authorized a listing agreement for Lots 4 & 5. These lots are approximately 7.34 acres in total. An appraisal of the properties was completed on 3/12/22. Both lots are listed for their appraised value. Lot 4 is 6.12 acres and is listed for $2,000,000 ($7.50 a sq.ft.). Lot 5 is 1.22 acres and is listed for $530,000 ($9.97 a sq.ft.). Even though the parcels are adjacent, Lot 5 was determined to have a higher value based on being zoned general commercial. The City received an offer to purchase both lots from Samuelson Development LLC for $2,300,000 ($7.19 a sq.ft.). Samuelson owns the apartments across the street and plans on developing additional apartments on these lots if the sale is approved. The City made a counter offer of $7.50 a sq.ft. ($2,398,000) for both parcels. Samuelson has accepted that offer. Additional conditions of the sale are that: 1) the purchaser dedicate a 20 foot permanent utility easement along the southern boundary of the property for a City water main that is located on the properties being purchased; 2) the City will not require the purchaser to build Golden Eagle Drive on the southern edge of the lots (the purchaser will need to build the road if it decides to take access off of this right of way); 3) City approval of any rezones and planned development plans necessary for completion of the purchaser’s apartment project. The City is not legally bound to approve the purchaser’s project, but if the City fails to do so the purchase of the property will not occur and the City will need to relist the property for sale.

Funding Source & Fiscal Impact (if applicable):

Funding Cost Center
Funding Source & Fiscal Impact Notes:
No City funds will be needed to transfer the parcel. The City will receive $2,398,000 from the sale, minus a real estate commission of 5.5%, and any applicable closing costs.

Recommendations:

Origination Recommendation Action:
Approve
Origination Recommendation Notes:
Staff is recommending approval
City Council Options:
You can approve or deny. If you approve the purchaser will begin the process of rezoning the property and seeking approval of its proposed project. If you reject the agreement, the property will continue to be listed and we will wait for future offers.

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